Brits Increasingly Pessimistic About Inflation, Survey Shows Britons are becoming increasingly pessimistic about inflation, with expectations reaching their highest level since 2011. The survey, conducted by YouGov in October, shows that Britons’ inflation expectations have risen to 3.2% for next year, pointing to an understandable pessimism in a time of rising energy expenses and house prices. To compare, inflation expectations in the September survey were for 2.5%. Inflation expectations for the next five to ten years was also pessimistic, with the majority of those polled saying they expected 3.9%, another increase from average expectations of 3.3% in September.
The current rate of consumer price inflation is 2.7%, which is higher than the target set by the Bank of England. The last time YouGov survey revealed such pessimistic sentiment was in October 2011, when inflation was much higher at 5.2%.
Inflation expectations were the worst among the elderly (aged 50 years and older), people with low income, people living outside of London, and those living in southern England. These are the groups for which the increase in energy bills and house prices will be felt the most. British Gas, nPower and SSE all announced in recent weeks that they will raise prices for the energy they supply by an average 10%. As for house prices, they were 6% higher in October this year than they were the previous year.
It seems that despite the general economy’s recovery, wages are continuing to lag seriously behind and the cost of living is rising, bringing the living standards of Britons to a level last seen ten years ago.