Inflation expectations in the UK have eased back from seven-year highs despite the pick-up in energy costs, a key quarterly survey from the Bank of England found.
In its May spotlight on public attitudes to inflation conducted by pollsters NOP, the BoE said median expectations of the annual CPI rate of inflation for the coming year were down to 2.5 per cent compared with 2.7 per cent in February's report.
The news will be welcomed by the BoE Monetary Policy Committee and suggests that interest rates in the UK will likely stay put for some time yet.
They have stood still at 4.5 per cent since August last year.
The survey also justifies BoE governor Mervyn King's comments last week that while inflation expectations have crept higher, inflation remains under control. Elsewhere in the survey, the BoE revealed respondents thought that current inflation stood at 2.7 per cent, down from 2.8 per cent in the February survey.
It also found that 55 per cent felt the economy may end up weaker rather than stronger if prices started to rise faster, similar to the February and November results.
And, when asked about the future path of interest rates, 48 per cent expected them to rise in the next 12 months, compared with 47 per cent in February and the four year low of 34 per cent in August.
Another four per cent thought rates would fall in the next 12 months, compared with seven per cent in February.
Twenty-eight per cent said they expected borrowing costs to remain "about the same", in line with the previous three surveys.