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HomeEconomyUK long-term inflation expectations hit record 4.8% - Citi/YouGov

UK long-term inflation expectations hit record 4.8% – Citi/YouGov

David Milliken

LONDON (Reuters) – UK households’ expectations for average inflation over the next five to 10 years Inflation hit a record 4.8 percent in August, more than double the Bank of England’s 2 percent inflation target, according to a monthly survey by YouGov and U.S.-based Citibank on Wednesday.

The Bank of England maintains a close watch on inflation expectations indicators to see if inflation has recently surged to 13 year highs 12.1% in July has led to public expectations that inflation will rise in the medium term.

Citi economist Ben Nabarro said the latest survey reading could unsettle the Bank of England’s monetary policy committee and encouraged its members to vote for a second bank rate It was raised by half a point in a row at the September meeting.

“Today’s data, especially long-term expected levels, suggest that after months of high inflation, a further acceleration in winter now poses a serious risk to the medium – long-term price stability,” he wrote. Close to its target – Long-term inflation measures typically remain in the 2.9% to 3.4% range.

The increase in August from the 3.8% reading in July was the largest on record and the first increase since February.

Citi added that the public Inflation expectations for future months rose to 6.3% in August from 6.0% in August. However, it said the reading could be artificially low due to the limited options in the original survey question.

Another question offered a wider range of inflation options, showing a rise in expectations for the year ahead, from 7.8% in July to in August, Citi said. .3%.

The Bank of England forecast earlier this month that consumer price inflation will hit in October 13 % above the peak, while Citi expects to exceed 13% of January’s percentage.

YouGov surveyed 2, 003 adults online in August. 24 and25.



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