–July Year-Ahead Inflation Expectations 2.7% Vs 3.0% in June
–Longer Term Inflation Expectations Steady At 3.3%
LONDON (MNI) – UK year ahead inflation expectations fell in July,
bucking the upward trend in recent months, according to the latest
YouGov/Citi survey.
Bank of England Monetary Policy Committee members have frequently
cited concerns that inflation expectations would become un-anchored as a
result of the run of high inflation outturns, but the latest YouGov/Citi
survey does not show this happening.
The median inflation expectation for the year ahead in the July
survey fell to 2.7% from June’s 3.0% in June and May’s 2.8%. hitting its
lowest level since April.
The survey found among those expressing a view, 30% predicted
inflation would be below the BOE’s 2.0% target in a year’s time,
compared to 19% in June.
Longer term inflation expectations. for 5-10 years, held steady at
3.3%, matching the June outturn.
Citi economist Michael Saunders said the survey results “suggest
that the marked rise in CPI inflation, and Budget VAT hike, have not
destabilized inflation expectations so far. This is likely to give the
MPC some reassurance, given their close focus … on inflation
expectations.”
Saunders warned, however, that with inflation likely to remain
above the 2.0% target for an extended period, it was too early to “sound
the all clear.”
–London Newsroom: Tel:+44207 862 7491;email:drobinson@marketnews.com
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