Britons among most gloomy about inflation outlook, poll finds

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People in the UK are among the least confident that financial authorities will quickly get inflation under control, according to an Ipsos Mori poll of 29 countries around the world seen by the Financial Times.

The findings show that six out of 10 people surveyed in May thought it would take at least a year to return inflation to what they thought were normal levels with only Swedish respondents showing a higher level.

The figures underline concerns at the Bank of England that the UK is now feeling the effects of rising prices and wages in a process that will keep consumer price inflation higher for longer.

THE the central bank hopes that, in data to be released on Wednesday, a sharp drop in the official CPI inflation rate for April will help change attitudes and ease fears of continued rapid price increases.

In the Ipsos Mori poll, conducted this month, 60% of respondents in the UK said they believe it will take more than a year for inflation to return to normal levels, the same percentage as in the Netherlands and less than 64% of people in Sweden who shared these fears.

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In all other countries surveyed, an average of 46 percent said it would take more than 12 months to bring inflation back down.

The UK population result agrees with the same forecasts as the BoE that inflation will return to its 2% target in late 2024 or early 2025.

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With high and potentially sticky inflation, British households were also the most morose about their levels of disposable income of all the countries surveyed.

Some 46% of Britons surveyed thought their disposable income – defined in the survey after tax and living expenses – would decline in the next year.

Mike Clemence, researcher at Ipsos Mori, said: ‘British opinion towards the cost-of-living crisis is significantly more negative than the overall global picture.

UK households are facing higher costs and higher taxes because income tax thresholds and allowances have been frozen until 2028, dragging millions more to pay income tax at both the main rate of the 20% and at higher rates.

When asked about their standard of living, however, UK respondents were more likely to say it will decline than the global average, but this was not an outlier as with disposable income.

The Ipsos Mori results provide insight into public attitudes towards inflation ahead of the BoE’s next quarterly survey, to be released in mid-June.

In the BoE’s February survey results, members of the public were well aware of the rise in inflation, with the average respondent stating that the inflation rate had been 9.2% over the past year, close to the consumer price inflation rate of 10.4% applied in February.

The average respondent expected inflation to be 3.9% in the year ahead and then stabilize at a rate of 3%, still 1 percentage point above the central bank’s 2% target.