Consumers expect inflation to rise, says Bank survey

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In the first rise since last August consumers told the Bank of England in a GfK NOP survey that they expect inflation to run at 2.4% over the next 12 months.

That is up from 2.1% in the last survey in February.

Asked what the current rate of inflation was, people said that it was 4% which, although down from the previous 4.2% is still double the Government's target rate of 2%.

Actual consumer inflation fell from 3.1% in February to 2.3% in April. And more people said the Bank was doing a good job on inflation than did three months ago. George Buckley, an economist at Deutsche Bank, said: "At the margin, people are going to think that maybe it's less likely that we are going to see deflation.

"The degree of stimulus we have seen has been huge that has led to a rise in economic activity and people think that perhaps the recovery is happening and what goes hand in hand with recovery is a rise in inflation."

But Vicky Redwood of Capital Economics warned that while people's expectations remain "fairly well anchored" they may have been nudged up by recent rises in petrol and food prices.

She said that, unlike most of her fellow commentators, she continues to "think that deflation remains the key concern for policymakers".