(Bloomberg) -- The U.K. public's expectations for inflation over the next year jumped by the most since 2016 last month, with Britons saying they were the least satisfied about how the Bank of England was doing its job in almost a decade.
A survey commissioned by the central bank found the median estimate for price gains in the next 12 months was 3.2%, the most since 2019 and a jump from 2.7% in August. Looking over the next five years, the figure was 3.1%. Both those estimates are well above the central bank's 2% target.
When asked to assess the way the BOE is “doing its job to set interest rates to control inflation,” the net satisfaction balance – the proportion satisfied minus the proportion dissatisfied – was 14%, the lowest since 2012.
The survey comes as inflation in the U.K. stands at the highest level in a decade, thanks to a spike in energy prices, a number of high profile supply chain issues and increased demand after coronavirus lockdowns. While the BOE expects the pace to subside next year, the results suggests expectations of higher prices are becoming more ingrained.
That may worry officials and increase calls for imminent rate increases. The bank had been widely expected to hike rates for the first time since the pandemic at its meeting next week, although the emergence of the omicron variant of Covid-19 has seen bets on a move pushed back into 2022.
The survey, conducted by Kantar between Nov. 9 and Nov. 15, suggests the public are increasingly prepared for tighter monetary policy. It showed 60% of respondents expected interest rates to rise over the next 12 months, the most since 2017 and up from 43% in August.
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