Pollster Find Out Now and election experts Electoral Calculus have run a poll asking people what they think about interest rates and whether they should be higher or lower.
The poll asked GB residents whether they thought interest rates were about the right level, or if they should be higher or lower. We also asked our respondents what actual level of interest rates they would like.
In summary:
We asked 2,019 people the following question:
"Interest rates are the cost of borrowing and the reward paid to savers. Currently interest rates are around 1.25% and UK inflation is around 9%. Do you think interest rates are about right, too high or too low?"
| Response | All respondents | CON voters | LAB voters |
|---|---|---|---|
| Interest rates are too low and should be increased | 36% | 51% | 29% |
| Interest rates are about right | 12% | 14% | 11% |
| Interest rates are too high and should be reduced | 19% | 15% | 21% |
| Don't know | 33% | 20% | 39% |
The table excludes those who refused to answer.
Our poll shows more voters think that interest rates should rise than think they should fall (though many voters weren't sure). This is particularly marked for Conservative voters, among whom there is a majority for raising rates.
We also asked people what interest rate they thought would be right. The question was:
"Interest rates are currently around 1.25%. If you could choose, what do you think interest rates should be? (Enter a number of percentage points, such as "2" to mean an interest rate of 2%)"
| Interest rate range | All respondents | CON voters | LAB voters |
|---|---|---|---|
| Less than 0.5% | 6% | 3% | 7% |
| Between 0.5% and 1.5% | 28% | 22% | 30% |
| Between 1.5% and 2.5% | 28% | 27% | 31% |
| Between 2.5% and 3.5% | 19% | 25% | 16% |
| Between 3.5% and 4.5% | 5% | 8% | 4% |
| Between 4.5% and 5.5% | 8% | 11% | 6% |
| More than 5.5% | 5% | 4% | 7% |
The overall median response was an interest rate of 2%. Among voters who think rates should be increased, the median response was an interest rate of 3%.
Compared with current UK Base rates of 1.25%, the public overall think that interest rates should be substantially higher at 2%. And of those who would like to see rates increased, they would like an interest rate which is more than double the current base rate.
There are two sides to every loan – the borrower and the lender. While borrowers prefer low interest rates, lenders and investors prefer higher interest rates. The long period of ultra-low interest rates has recently been questioned by some economists who argue that these long-term low interest rates damage the economy by misallocating assets, creating asset bubbles, and enabling zombie companies to limp along unproductively.
The public in general, and Conservative voters in particular, seem to share the sentiment that interest rates are too low at the moment and that they should be increased.
Chris Holbrook, CEO of Find Out Now: "It seems many of the public agree with the idea that the Bank of England should move quickly to put up interest rates. They are feeling inflation hit hard and it worries them."
Martin Baxter, CEO of Electoral Calculus: "It remains to be seen whether monetary policy will enter the Conservative leadership campaign to the same extent that fiscal policy already has, but there seem to be plenty of Conservative votes on offer for either candidate who takes a more hawkish stance on raising rates."
Find Out Now and Electoral Calculus are both members of the British Polling Council and abide by its rules.
Full tables can be downloaded here.