Lloyds: Consumers predict five per cent inflation

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Lloyds: Consumers predict five per cent inflation

Tue 26th Aug 2008

Consumer expectations about inflation have risen for the tenth consecutive month, a poll by Lloyds TSB has shown.

The bank's monthly Consumer Barometer, surveying 2,000 consumers, found the average prediction of inflation in a year's time to be five per cent, up from 4.8 per cent in July.

While fewer people now predict higher interest rates in 12 months, those who do still comprise a 60 per cent majority.

In addition, more people are worried about remaining employed.

Feelings of job security fell from -17 per cent in July to -19 per cent now.

Lloyds TSB Corporate Markets chief economist Trevor Williams said that recent cuts at supermarket petrol pumps had not affected consumer predictions for inflation and noted that the Bank of England has stated that inflation will go below two per cent within two years.

According to a survey by Bloomberg News, half of economists predict that the Bank of England will cut interest rates before the end of the year.

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