Dissatisfaction felt by Brits towards the Bank of England’s efforts to tackle inflation has grown another 4 percentage points in recent months as projections reach eye-watering double digits and mortgage rate rises make repayments seem unaffordable.
In the central bank’s latest quarterly ‘Inflation Attitudes Survey’, which covers June to August, net satisfaction fell to -7 per cent, down from -3 per cent in May. A year ago, net satisfaction sat at 18 per cent.
Since December 2021, the Bank of England has made six consecutive hikes to interest rates, with the base rate rising from 0.1 to 1.75 per cent in the past nine months.
The Bank is next set to make a decision on the base rate next week (September 22). It is expected that the base rate will be driven even higher to counteract inflation.
Catherine Mann, a member of the Bank of England’s Monetary Policy Committee, said last week a “fast and forceful” rise in interest rates is needed to prevent higher inflation.
She said the UK faces the risk of a longer and more painful interest rate hike cycle if inflation becomes more entrenched.
Citi has forecast an 18.6 per cent price rise, far above the Bank’s 13 per cent expectation. Experts have warned that millions of people in the UK will be in “dire straits” if inflation predictions for 2023 are correct.
The government’s £150bn energy package will help ease the bite of inflation for many. Prime minister Liz Truss told the Commons last week (September 8) that the average household will have their annual energy bills frozen at a maximum of £2,500 for two years.
But according to one survey, a third of mortgage borrowers have said rising interest rates - the tool used to ease inflation - has in turn meant they can no longer afford their mortgage repayments.
This figure rises to nearly half (48 per cent) among younger mortgage customers, ie, those between 18 and 34.