Bank of England uses Google searches to track inflation worries
Key Points
- Bank of England's Alan Taylor used Google search data in a 29 September speech
- Searches and news coverage of inflation spiked sharply in 2022
- Inflation peaked at 5.8% of all UK news articles
- Households now react more strongly to food and petrol prices
- Taylor sees no compelling case for further rate rises yet
Bank of England rate-setter Alan Taylor used Google search data to show inflation worries surged after 2022.
Taylor, a member of the Bank’s Monetary Policy Committee, presented the findings at the 2026 Dow Lecture at the National Institute of Economic and Social Research on 29 September.
The Bank’s analysis tracked UK Google search interest in six terms, including inflation, energy, oil, petrol and gas. It paired that with news coverage data from the Factiva database.
Searches and media references to inflation both rose sharply in 2022 as energy bills and fuel prices climbed. At its peak, inflation featured in 5.8% of all news articles, far above coverage of any single component such as energy or food.
Taylor said the jump in attention marked a break from the inflation-targeting era, when stable prices meant most people rarely thought about inflation at all.
“A central bank that could previously assume a high degree of inattention among households and firms may no longer be able to do so,” said Taylor.
Bank research found households now react more strongly to prices they see often, such as food and petrol, than they did before 2022. A one percentage point rise in what people believe inflation is today lifts their expected inflation for the year ahead by around 0.4 to 0.5 percentage points.
Taylor warned that this greater attention cuts both ways. Clear central bank messages may now carry more weight, but bad news on prices can also shape public expectations faster.
His analysis also drew on the Boosted Inflation Model, a machine-learning tool that Bank staff built. The model links a notable share of persistent UK inflation to expectations, though Taylor cautioned against overstating its precision.
Taylor said he saw no compelling case for further interest rate rises unless energy prices stay high for an extended period and start pushing up wages and prices more broadly. He added that the Bank will need to cut rates once energy risks fade, if the economy evolves as expected.
