UK inflation expectations rise in May – BoE

British inflation expectations for the coming year rose to 2.4 percent in May from 2.1 percent in February, a Bank of England survey showed on Thursday, the first rise since August.

The BoE/GfK NOP Inflation Attitudes Survey also showed Britons think the current rate of inflation fell to 4.0 percent last month from a perceived 4.2 percent in February — still double the central bank's official target.

The latest actual consumer price inflation rate, however, stood at 2.3 percent in April and retail price inflation, on which many wage deals are based, is in negative territory.

Policymakers expect inflation to fall sharply over the coming months as the effects of recession feed through.

The BoE has cut interest rates to a record low of 0.5 percent and embarked on an unprecedented 125 billion pound asset buying spree to kickstart the economy, which shrank 1.9 percent in the first quarter of the year — the biggest drop since 1979.

The survey showed the public was more satisfied with the way the BoE is doing its job than in February. The net satisfaction index rose to 17 percent in May from 10 percent.

The BoE survey was conducted between May 7-12.