The Bank of England said August readings of the public's inflation expectations fell sharply after it changed the company that performs its regular survey of households. Policy makers use such expectations to gauge the risk that inflation will remain elevated, but the central bank said the move in provider complicates interpretation of the recent results.
In its note, the BoE warned that comparisons between the headline results from May, when Ipsos conducted the survey, and August, when Savanta carried it out, should be treated cautiously because part of the change reflects the switch in providers rather than pure like-for-like shifts in public views.
"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 Bank of England said.
Savanta's August figures showed year-ahead inflation expectations at 3.2%, two-year-ahead expectations at 2.9% and five-year-ahead expectations at 3.2%.
By contrast, the BoE had previously reported the Ipsos results from May, which recorded year-ahead expectations of 4.0%, two-year expectations of 3.5% and five-year expectations of 3.9%.
To further illustrate the provider effect, the BoE said it had also asked Savanta to run the May survey. Those Savanta-run May results were lower than Ipsos's May numbers by about half a percentage point on the same horizons, coming in at 3.6% for one year, 3.1% for two years and 3.3% for five years.
Both polling firms, when they conducted the May polls, reported the same figure for the public's perception of current inflation: 5.0%.
The central bank noted that Savanta was awarded the survey contract following a competitive retendering process. Given the provider change, the BoE said it was hard to draw firm conclusions from the headline movement between May and August.
In short, while headline expectations have fallen in the latest survey results, the BoE emphasised that at least some of that decline likely reflects methodological or provider-related differences rather than a clear shift in households' inflation outlook.