Britains expectation of further inflation in the next 12 months was at a series high in August, new figures from the Bank of England and GfK NOP show.
When asked what they expected the rate of inflation will be in a years time, UK residents questioned in the poll gave a median answer of 4.4 per cent, up from 4.3 per cent in May, which was in turn the highest result recorded in the data series. Meanwhile, the median result for the perceived level of current inflation was 5.4 per cent, compared with the previous series high of 4.9 per cent. Furthermore, fewer people than ever thought that inflation was at about the right level, with 39 per cent saying they believed this to be the case.
As inflation has continued, many consumers may have found that their ability to pay for everyday living costs such as food and petrol have been constrained. This, in turn, could have a wider impact on their ability to meet mortgage or personal loan repayments.
Indeed, when it comes to getting some respite in repayment rates in the next 12 months, 54 per cent expected that interest rates on products such as mortgages and loans would rise in the next year, compared with 48 per cent in May. Meanwhile, ten per cent said they thought the Bank of England would enact an interest rate cut in the next 12 months, down from 12 per cent in May, showing that a declining number of people expect loan and mortgage commitments to lessen.
This is despite the balance of people believing that interest rates should go down rather than up. While nine per cent said they thought higher rates would be best for the economy, 40 per cent said that rates needed to fall.
For those looking to take advantage of current interest rates in anticipation of a future increase, taking out a cheap low-rate loan soon may be of interest.
It appears that fewer people are satisfied with the current job that the Bank of England is doing in terms of limiting inflation, the net satisfaction index - which measures the number of people who are happy minus those who are not - stood at 18 per cent, down four percentage points from May.
Commenting on the findings, Howard Archer, chief UK and European economist at analyst firm Global Insight, told the Times: "This highlights how sharply higher food and energy prices are shaping peoples perception of the overall inflation level. The further rise in inflation expectations in August is obviously not good news for the Bank and could reinforce the monetary policy committees reluctance to cut interest rates in the near term, despite the likelihood of recession."
For those who have been struggling to keep up with payments for food and other areas of expenditure such as mortgages and fuel costs, taking out a debt consolidation loan may be of interest. Indeed, a recent statement from the Council of Mortgage Lenders has warned that the Bank of England will be unable to reduce interest rates until the "super spike" in inflation subsides.
Author Resource:-
Abbi Rouse writes for All About Loans. Visist us today to apply for cheap loans online, personal finance, and UK tenant loans.
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