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UK public inflation expectations fall

In the spring, the average British person expected the inflation rate to be 3%, down from 3.3% in November, as recorded by the Bank of England (BoE) survey published this week. This reached close to the average over the last 21 years between 2000-2021, which was 2.8%, and the lowest rate since August 2021 before inflation rates proliferated. These figures will contribute to the BoE cutting the cost of borrowing after it jumped from a record low of 0.1% to a 15-year high of 5.25%.

A more optimistic outlook for price increases has boosted the BoE’s methods in cutting inflation, as the number of people dissatisfied has fallen to 29% (the lowest in 18 months). However, some economists, such as Paul Dales at Capital Economists, say that although the public outlook provides a boost for the BoE, it won’t actually mean there will be an interest rate cut any time soon.



Over the last seven days, the UK’s front page news cycle has covered topics. UK property market shows green shoots of recovery, UK-India trade deal talks put on ice until end of spring and UK treasury official says Britain’s economic gloom has been vastly exaggerated. Some of the newspaper headlines from this week were:


UK economy returns to growth

Office for National Statistics released figures this week that show that the UK experienced a return to growth in January as the GDP rose by 0.2% between December and January due to the expansion of the services sector. These figures have increased expectations for the first quarter and give Rishi Sunak a significant boost ahead of the general election. Despite the positive growth in January, output was 0.3% below January 2023 due to the cost-of-living crisis and high-interest rates. However, most economists expect rising wages and a slow drop in inflation rates will help jumpstart the economy for the rest of the year.

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17. The Policy Watch

17. Weekly Newsletter

16. The Policy Watch

16. Weekly Newsletter