Confidence in Bank drops to all-time low

PUBLIC confidence in the Bank of England has slumped to an all-time low in another setback for its Governor, Andrew Bailey.

For the first time, more people are dissatisfied than satisfied with Threadneedle Street’s efforts at controlling inflation, according to the Bank’s quarterly inflation attitudes survey.

Just 25pc said they were pleased with the Bank’s performance, the lowest since the survey began in 1999.

The public is also the most pessimistic about inflation on record, anticipating price rises of 4.6pc in the shops over the next 12 months.

The results turn up the heat on Mr Bailey and the Monetary Policy Committee, which is expected to bump interest rates to 1.25pc at its meeting next week.

Andrew Sentance, a senior adviser at Cambridge Econometrics and former MPC member, said the Bank “has not really communicated and demonstrated that it is trying to control inflation”.

UK inflation reached 9pc in the year to April, the highest reading in 40 years and four and a half times the Bank’s 2pc target. Econo- mists have warned annual price rises may break into the double figures later this year when another increase in the energy price cap kicks in.

The Governor has come under intense criticism for failing to see off the current crisis, although the Bank’s defenders argue that many of the cost increases are being driven by external factors including the war in Ukraine.

Conservative MP Mel Stride, chair of the Treasury select committee, said: “With inflation forecast to reach 10pc, against a target of 2pc, it can’t be a surprise that the public are increasingly sceptical as to whether the Bank has got a firm enough grip on rising prices.

“Worryingly, the survey shows the public expect future inflation to be higher than they did when they were asked in February. This continued de-anchoring of future inflation expectations away from the 2pc target combined with a very tight labour market poses a real risk of the UK tipping into a wage-price spiral.”