Bank of England/Ipsos Inflation Attitudes Survey - February 2025:
- To note, the survey was gathered before the start of the Iran conflict.
Inflation:
- On current rate of inflation, respondents gave a median answer of 4.6% (prev. 4.7% in November).
- Median expectations of the rate of inflation over the coming year were 3.2% (prev. 3.5% in November).
- Expected inflation in the next 12 months, respondents gave a median answer of 3.2% (prev. 3.3% in November).
- Expected longer term inflation of 3.7% (prev. 3.7% in November).
Interest Rates:
- 32% of respondents said that interest rates on things such as mortgages, bank loans and savings had risen over the past 12 months (prev. 38% in November).
- 35% of respondents thought that interest rates had fallen over the past 12 months (prev. 26% in November).
- 30% of respondents expected rates to rise over the next 12 months (prev. 38% in November).
- 29% said they expected rates to decline over the next twelve months (prev. 25% in November).
Context
The Bank of England's Inflation Attitudes Survey shows a slight decline in inflation expectations among respondents, with current inflation perceived at 4.6%, down from 4.7%. The notable drop in anticipated interest rate hikes reflects a changing sentiment, potentially indicating a more dovish outlook which could influence monetary policy decisions moving forward. This could have implications for market rates and the overall economic environment as expectations adjust in light of these new data points.
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