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Interest rates: Public unhappy with Bank of England’s strategy to curb rising prices

FILE - A woman with an umbrella stands in front of the Bank of England, at the financial district in London, Thursday, Nov. 3, 2022. Britain’s economy shrank in the three months to September, official statistics said Friday, Nov. 11, 2022, as forecasters warned of many months of contraction to come. The Office for National Statistics said gross domestic product fell by 0.2% between July and September, a smaller-than-expected contraction that nevertheless is seen to signal the start of a long recession. (AP Photo/Kin Cheung, File)
Public satisfaction with Bank of England’s inflation record falls to all-time low. Photo: Kin Cheung/AP (ASSOCIATED PRESS)

People in the UK believe inflation is going to climb higher next year as satisfaction with how the Bank of England (BoE) is handling the rise in prices at an all-time low.

The public’s expectation for inflation in the next one to two years climbed to 3.4% in November from 3.2% in August, according to the BoE’s inflation attitudes survey.

Meanwhile, expectations for inflation over the coming year fell slightly to 4.8% from 4.9% in August, while those for five years' time rose to 3.3% in November from 3.1%.

In November, over a third (35%) of the UK population was not happy with how the central bank was handling inflation.

With only 23% satisfied with the BoE’s performance, net satisfaction dropped to minus 12%, the lowest since records began.

Read more: Bank of England 'set to raise' interest rates to 3.5%

Asked what would be "best for the economy" ⁠— higher interest rates, lower rates or no change ⁠— 20% thought rates should "go up", compared to 30% in August 2022.

Some 30% of respondents thought that interest rates should "go down", compared to 24% in August 2022, while 25% thought interest rates should "stay where they are", down from 26% in August 2022.

When asked what would be "best for you personally", 27% of respondents said it would be better for them if interest rates were to "go up", compared to 31% in August 2022.

Some 30% of respondents said it would be better for them if interest rates were to "go down", compared to 25% in August 2022.

The Bank of England has hinted several times that it is preparing to further raise interest rates over concerns that inflation could become embedded in the UK’s economy.

Respondents were braced for more interest rate increases, with 74% expecting borrowing costs to rise over the next 12 months.

Read more: Interest rates: Record rise in 30-year mortgages for first-time buyers

At a record high of 11.1%, inflation is five times over the BoE’s mandate target of 2%.

In the last meeting of the BoE's Monetary Policy Committee (MPC), it raised interest rates to 3% with the biggest single rise in borrowing costs since 1989.

Watch: How does inflation affect interest rates?