LONDON, Sept 11 (Reuters) - The Bank of England reported a sharp drop in the public's expectations for future inflation in August after it changed the company which conducts surveys for it.
Public inflation expectations are a key factor for many BoE policymakers in assessing the risk of persistent inflation, but the central bank said it was hard to draw firm conclusions about the trend due to its change in survey providers.
"Comparisons of changes (in) inflation expectations between the headline May
results – Ipsos – and the headline August results – Savanta – should ... be treated with caution, as in part they reflect changes in the provider as well as like-for-like changes in expectations," the BoE said.
August's data showed Savanta reported a fall in year-ahead inflation expectations to 3.2%, 2.9% for two years ahead and 3.2% for five years ahead.
The BoE had previously reported Ipsos data for May which showed year-ahead inflation expectations of 4.0%, 3.5% for two years ahead and 3.9% for five years ahead.
However, the BoE said on Friday it had also commissioned Savanta to survey inflation expectations in May, which delivered results around half a percentage point lower than Ipsos did for the same time horizons, at 3.6%, 3.1% and 3.3% respectively.
Both polling companies reported the same public perception of current inflation – 5.0% – when they did the poll in May.
The BoE said it awarded Savanta the contract after a competitive retendering process.
(Reporting by David Milliken, editing by Andy Bruce)
