Pollsters from GfK NOP surveyed over 2,000 people on behalf of the Bank on their attitudes to inflation.

Respondents expected prices to rise by a further 4.2 per cent in the next 12 months. This was the highest expected rate since 2008. Almost a third said they expected prices to rise by five per cent or more.

Some 68 per cent of people said that these faster rising prices were likely to weaken Britain’s economy.

With this in mind, over half of respondents said they were planning to shop around for better value goods and service and cut back on spending.

Regarding long-term expectations of inflation in five years time people were confident inflation would have fallen. However they did not expect it to fall by very much as the average expectation was that inflation would stand at 3.5 per cent.

This is only one per cent lower than the current rate and still 1.5 per cent above the Bank of England’s target of two per cent.

Regarding interest rates, some 36 per cent of people said that interest rates should remain at their current level while only 19 per cent said they should rise.

The current interest rate of 0.5 per cent has remained the same since March 2009.

However, 25 per cent of people thought interest rates had risen over the past 12 months while 22 per cent thought they had fallen. Only 35 per cent correctly identified that they had stayed the same.