Confidence in Bank of England Drops to Record Low

Confidence In Bank Of England Drops To Record Low

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Ed Conway

December 15, 2011 9:58 AM

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Britons’ happiness with the Bank of England and the job it’s
doing to manage the economy has plunged to the lowest level on record –
according to the Bank’s own research.
Every quarter, the Bank
commissions NOP to survey the British public about their attitudes to
inflation, interest rates and monetary policy, and the results for the latest of those surveys, carried out last month, show an unprecedented drop in public support for the Bank’s management.
The
survey asked respondents to assess the way the Bank is “doing its job
to set interest rates to control inflation” and the net satisfaction
balance – the proportion satisfied minus the proportion dissatisfied –
came in at 9%. This is not only lower than the 16% recorded in August,
it is the lowest level since the Bank started the survey in 1999 – as
you can see from this chart.

Perhaps
this shouldn’t come as a surprise: inflation has been persistently
above target for years; families have been suffering as this has eaten
into their incomes and squeezed them even more than the Government’s
austerity programme. Moreover, there is considerable concern about the
wisdom of the Bank’s quantitative easing scheme, whereby it is buying at
least £275bn worth of UK government debt – something that provokes
unsettling echoes of attempts by notorious governments to monetise their
deficit.
But the research will doubtless concern the Bank’s
Monetary Policy Committee. It has said repeatedly that its success
depends at least in part on the trust the British public have in it to
keep inflation under control in the long-run – even if it rises above
target in the short-term.
More encouraging are the responses to
the survey’s questions about inflation and public expectations of it. It
found that although the public perception of inflation had risen from
4.8% to 5%, expectations for movements in prices over the next year had
dropped from 4.2% to 4.1%.










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