BoE reports prices and economy fears

Highlights from the survey

1. Asked to give the current rate of inflation, respondents gave a median answer of 3.4%, compared with 3.2% in November 2009.
2. Median expectations of the rate of inflation over the coming year were 2.5%, compared with 2.4% in November.
3. By a margin of 60% to 9%, survey respondents believed that the economy would end up weaker rather than stronger if prices started to rise faster, compared with 57% to 10% in November.
4. 54% of respondents thought the inflation target was 'about right', the same proportion as in November, while 21% said the target was 'too high' and 12% said it was 'too low'.
5. 41% of respondents thought that interest rates had fallen over the past 12 months, compared with 49% in November, while 22% of respondents said that interest rates had risen over the past 12 months, compared with 21% in November.
6. When asked about the future path of interest rates, 53% of respondents expected rates to rise over the next 12 months, compared with 47% in November, and 6% of respondents expected interest rates to fall over the next 12 months, similar to November.
7. Asked what would be 'best for the economy' - higher interest rates, lower interest rates or no change in interest rates - the picture was broadly unchanged from November: 24% of respondents thought interest rates should 'go up', 15% of respondents thought that interest rates should 'go down', and 36% thought interest rates should 'stay where they are'.
8. When asked what would be 'best for you personally', 28% of respondents said interest rates should 'go up', compared with 25% in November, while 25% of respondents said it would be better for them if interest rates were to 'go down', compared with 24% in November.
9. When asked how strongly respondents agreed or disagreed that a rise in interest rates would make prices rise more slowly in the short term, the net response was +15% in February 2010, the same response as in February 2009. When asked how strongly respondents agreed or disagreed that a rise in interest rates would make prices rise more slowly in the medium term, the net response was +25%, compared with +26% in February 2009.
10. When asked in February if a choice had to be made either to raise interest rates to try and keep inflation down, or to keep interest rates lower and allow prices to rise faster, 66% of respondents said interest rates should rise, while 17% said prices should be allowed to rise. These compared with 66% and 13% in February 2009.

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