BOE Sees Sharp Decline in Public Inflation Expectations After Survey Provider Change

The Bank of England reported a sharp decline in public inflation expectations for August, following a change in the survey provider. According to Reuters, the central bank said it's difficult to draw firm conclusions about the underlying trend due to the switch from Ipsos to Savanta.

The Bank of England noted that comparisons between May and August data should be treated with care, as the differences partly reflect the change in provider as well as genuine changes in expectations. In August, Savanta's survey showed year-ahead inflation expectations at 3.2%, two-year-ahead expectations at 2.9%, and five-year-ahead expectations at 3.2%.

This is a significant drop from Ipsos' May results, which showed year-ahead expectations of 4.0%, two-year-ahead expectations of 3.5%, and five-year-ahead expectations of 3.9%. The Bank of England also commissioned Savanta to survey inflation expectations in May, which came in around half a percentage point lower than the Ipsos findings for the same time horizons.