Source: Sharecast
Median expectations for inflation over the coming year dropped to 3.2% from 4.0% in May, while expectations for the following 12 months declined to 2.9% from 3.5%. Longer-term expectations, covering roughly five years ahead, fell to 3.2% from 3.9%.
Respondents estimated the current inflation rate at 4.9%, marginally lower than the 5.0% recorded in May.
Expectations for interest rates also softened slightly, with 51% of respondents predicting rates would rise over the next 12 months, compared with 53% in May. Some 27% expected rates to remain unchanged, up from 23%, while 11% anticipated a decline.
Meanwhile, 32% said lower rates would be best for the economy, down from 38% in May, while the proportion favouring higher rates rose to 19% from 12%.
On a separate note, the central bank highlighted that a change in survey provider made direct comparisons with May difficult.
The Bank said Savanta had taken over the Inflation Attitudes Survey from Ipsos from August. A parallel survey in May showed inflation expectations were already lower under Savanta’s methodology, meaning the latest fall partly reflected the provider change rather than a pure shift in sentiment.
"Comparisons of changes inflation expectations between the headline May results (Ipsos) and the headline August results (Savanta) should therefore be treated with caution, as in part they reflect changes in the provider as well as like-for-like changes in expectations," the BoE explained.