Bank of England Inflation Attitudes survey "suggests the cost of living crisis still feels very real"

The fact that the current rate of inflation is perceived to be 5.5% suggests the cost of living crisis still feels very real. The slight uptick in people believing lower rates would be best for the economy may well reflect the continued strain many households with mortgages are under. It would be interesting to know how much weight the Bank of England's Monetary Policy Committee places on this data ahead of next week's rate decision.

Brits are still feeling the squeeze based on this survey data. The Bank of England's inflation survey reveals a public that is weary of rising interest rates, with fewer expecting further hikes despite two-thirds feeling the pinch in the past year. However, a growing desire for lower rates (42%) clashes with a rising number (24%) who see personal gain from higher rates. This public confusion around inflation and rates exposes a potential blind spot for the Bank of England. Are they effectively communicating their strategy, or are Britons left to guess the future of borrowing costs? As Threadneedle Street ponders its next move, the question remains: can they regain control of the narrative and steer the economy towards calmer waters?

There is a clear split in this Bank of England survey. Though many in the UK would prefer higher rates, those with significant savings are dwarfed by people with significant debt. The effect of rate rises has been ubiquitous and everyone has felt the consequences of both global factors and Liz Truss's brief spell in Number 10. This survey indicates that people are very aware of the impact rates are having on them, and the opinion polls also suggest that they are going to punish the incumbent party for the state of the country's finances.

The cost of living crisis is rumbling on, leaving borrowers in a bit of a spin. The movement in attitudes have been minute, but this is probably due to a reluctant acceptance of the new norm. This demonstrates that people think there's a long way to go before things settle and whilst it's advantageous for savers, borrowers are paying the price with each month that passes.

The data suggests that people are expecting inflation to fall but with housing costs and wages rising, I fear the opposite may happen. The issues that caused fuel and food to rise sharply have relaxed over recent months but it seems the key parts of inflation we can control are not under control. This will lead to higher rates for longer unless they can be grabbed by the horns and wrestled to the the ground.

Little change from the last survey. The gloomy mood around mortgage rates in particular continues to linger over the majority of borrowers, while savers would naturally like to see better rates.