Inflation expectations among Britons reached the highest since 2008, the quarterly Inflation Attitudes Survey from the Bank of England and Ipsos showed Friday.
The inflation rate for the coming year is seen at 4.3 percent compared to 3.2 percent expected in November. The 4.3 percent is the highest since 2008.
The five-year ahead inflation expectations advanced to 3.3 percent from 3.1 percent in the previous survey period.
Further, the survey showed that by a margin of 59 percent to 7 percent, survey respondents assessed that the economy would end up weaker rather than stronger if prices started to rise faster, compared with 55 percent to 10 percent in November.
About 65 percent of Britons expect interest rates to rise over the next 12 months, up from 60 percent in the previous survey.
About 33 percent of respondents said the inflation target was ‘about right’, down from 37 percent in November.
The war in Ukraine means that UK inflation is going to stay higher for longer, James Smith, an ING economist said. That indicates that the BoE is likely to raise rates again next Thursday and probably again in May.
However, Smith said markets are likely overestimating the pace of tightening this year.