Public predicts rising interest rates

by Richard Kilner

Story link: Public predicts rising interest rates

The Bank of England has released the results of its quarterly survey of public opinion, undertaken in August.

The respondents were over 2,000 people aged between 16 and 75, located throughout the United Kindom.

Those surveyed considered the present inflation rate (which officially stands at 4.4%) to be 5.4%, a full 50 basis points higher than the previous series high which occurred in May of this year.

Another record high was set with inflation expected to be 4.4% in the coming year.

Although inflation is presently over twice the government’s official target (2%) and forecast to rise in the immediate future, it is also expected, by some, to fall rapidly in the first half of 2009.

Over half (54%) predicted that interest rates would rise in the next 12 months, with only 10% expecting them to fall over the same period.

This contrasts starkly with what people think should happen, 40% of those surveyed considering it best if rates fell and only 9% thinking higher rates would be good.