FX.co ★ UK Inflation Expectations Ease In May: BoE Survey

Short-term inflation expectations among Britons eased in May, according to the quarterly Inflation Attitudes Survey conducted by Ipsos for the Bank of England, released on Friday.

Inflation expectations for the next year declined to 2.6 percent from 2.8 percent in February.

Respondents estimated the current inflation rate to be 5.5 percent, down from 6.1 percent in the previous survey.

Projections for inflation in five years remain steady at 3.1 percent, unchanged from the last survey period.

An overwhelming 65 percent of respondents believed the economy would weaken if prices started to rise more rapidly, compared to 6 percent who felt it would strengthen. This is a slight shift from February's figures, which were 69 percent and 5 percent respectively. Additionally, the survey revealed that 40 percent of respondents felt the inflation target was 'about right', consistent with February's results. Those who thought the target was 'too high' or 'too low' constituted 34 percent and 10 percent respectively.

Approximately 34 percent of respondents anticipated an increase in interest rates over the coming year, down from 36 percent in February. Meanwhile, nearly 25 percent believed interest rates would remain stable over the next twelve months, a slight decrease from 26 percent in the previous survey.