M&G’s Retail Fixed Interest team analyses the statistics for the answers to the first and second questions in the survey (ie, the expected annual inflation rates in 12 months and 5 years from now).

To achieve this, all answers are first ranked in ascending order, and several percentiles are subsequently determined. In this context, percentiles are expected inflation rates below which a certain percentage of responses can be found. For instance, the 50th percentile, the so-called median, is the middle value of the distribution, dividing the data set into a lower and an upper 50%. If there is an even number of values, the median is determined by calculating the average of the two middle values.

In the statistical analysis of the survey, we have chosen to use the median rather than the arithmetic mean because this is less affected by extreme values. To determine the dispersion of answers, the difference between the 75th and 25th percentiles is taken.

Finally, the number of ‘don’t know’ responses is divided by the total number of responses and the resultant percentage is recorded as an indicator of respondents’ level of uncertainty around inflation. Data processing for the remaining questions (three to six) is conducted by YouGov. Here, percentage values are calculated for each answer option by dividing the number of respective responses by the total number of responses.