UK inflation expectations rise as consumers outlook weakens

12th Jun 2026 09:17

(Sharecast News) - Inflation expectations in the UK picked up sharply in May, according to a closely watched Bank of England survey, with consumer perceptions about the current environment and future outlook pointing to rising price pressures at the till.

The quarterly survey, which was carried out over the week to 5 May, showed that consumers believe the current rate of inflation to be 5%, up from 4.6% in February.

Asked about the rate of inflation over the coming year, median expectations were 4%, up from 3.2% in February, while expected inflation over the following year is expected to be 3.5%, up from 3.2% in the previous survey.

Even longer-term price projections rose, with inflation expected to be at 3.9% in five years' time, an increase from 3.7% three months ago.

At the same time, 78% of consumers believed the economy would end up weaker if the inflation rate accelerated, with just 4% believing the opposite, compared with 72% and 4% respectively in February.

Also of note, a higher proportion of consumers said they believed interest rates have risen over the past 12 months, and 53% said they expected rates to rise further over the coming year, up sharply from 30% in the previous survey.