The Markit household index shows the strongest inflation expectations since 2014
The latest household survey from market shows a change of perceptions for both inflation and the Bank of England's monetary policy.
Headline finance index unchanged at 43.7
Nov inflation expectations at 29 month high of 75.1 vs 67.7 in Oct
Expected living costs 86.0 vs 83.5 prior. Highest in over 2 years
Rate cut (at anytime) expectations 17% vs 27% prior
Rate hike (6m) expectations 33% vs 24% prior
Says Philip Leake at Markit;
"UK households signalled the worst financial outlook for three years in November, with inflation expectations picking up to the highest since late-2014.
Whereas official prices data released yesterday morning pointed to consumer price inflation easing slightly, it also highlighted a record rise in producers' costs thanks largely to the weaker pound, thereby vindicating households' worries of mounting price pressures.
Meanwhile, fewer households see the Bank of England cutting interest rates again to boost the UK's growth prospects. In fact, the overall consensus is for a rise in the base rate aimed at curbing inflation- over half of respondents (55%) predict an increase within the next year for the first time post-Brexit."
The comments are probably a bit more bearish sounding than what the actual report shows. For the BOE, they'll be keeping an eye on those inflation expectations.
