British consumers expect faster price growth in the near and longer term in August, reversing a run of recent declines in inflation expectations. The shift comes as the Bank of England watches whether higher energy prices feed into more persistent inflation pressures.
Highlights
- Citi and YouGov report UK 12-month inflation expectations rose to 3.9% in August from 3.4% in July, with long-term expectations hitting 4.1%.
- Citi calls the move hawkish and notes the 4.1% long-term reading is the highest since April, but urges caution pending next month’s survey.
- Rising inflation expectations increase pressure on the Bank of England amid concerns over energy-driven price shocks spreading across the UK economy.
August survey signals renewed price concerns
As reported by Reuters, citing Citi and YouGov, expectations for inflation over the next 12 months jump to 3.9% in August from 3.4% in July, while longer-term expectations rise to 4.1% from 3.7%. Citi says the longer-term reading is the highest since April.Citi describes the latest move as a hawkish development for the series, saying inflation is set to pick up over the coming months. The bank also cautions against reading too much into a single release and says next month's survey should offer a clearer guide to how the increase should be interpreted.
Bank of England faces closer inflation scrutiny
The data adds to signs that UK households are becoming more concerned about future price pressures after several months of easing expectations. That matters for monetary policy because shifts in public inflation views can influence spending, wage demands and broader price-setting behaviour.The Bank of England is monitoring whether the jump in energy prices risks turning into more lasting inflation pressure across the economy. A sustained rise in expectations could complicate the outlook for policymakers as they assess how temporary cost shocks spread through Britain.
Sterling near a six-month high on Bank of England rate-hike expectations was a focus of our earlier coverage, as markets weighed whether sticky inflation would keep policy tighter for longer. We also outlined how fiscal risks and the upcoming October Budget could influence gilt yields and, in turn, the pound’s outlook if investors reassess the UK’s inflation and rate trajectory.
Latest Bank of England News
-
Afghanistan
-
Albania
-
Algeria
-
Angola
-
Argentina
-
Armenia
-
Australia
-
Austria
-
Azerbaijan
-
Bahamas
-
Bahrain
-
Bangladesh
-
Belarus
-
Belgium
-
Bolivia
-
Botswana
-
Brazil
-
Brunei
-
Bulgaria
-
Cambodia
-
Cameroon
-
Canada
-
Chile
-
China
-
Colombia
-
Congo
-
Costa Rica
-
Cote d'Ivoire
-
Croatia
-
Cuba
-
Cyprus
-
Czechia
-
DR Congo
-
Denmark
-
Dominican Republic
-
Ecuador
-
Egypt
-
El Salvador
-
Estonia
-
Eswatini
-
Ethiopia
-
Finland
-
France
-
Georgia
-
Germany
-
Ghana
-
Greece
-
Haiti
-
Hong Kong
-
Hungary
-
India
-
Indonesia
-
Iran, Islamic republic
-
Iraq
-
Ireland
-
Israel
-
Italy
-
Jamaica
-
Japan
-
Jordan
-
Kazakhstan
-
Kenya
-
Korea
-
Kuwait
-
Kyrgyzstan
-
Laos
-
Latvia
-
Lebanon
-
Lesotho
-
Libya
-
Lithuania
-
Luxembourg
-
Madagascar
-
Malaysia
-
Malta
-
Mauritius
-
Mexico
-
Moldova
-
Mongolia
-
Montenegro
-
Morocco
-
Mozambique
-
Myanmar
-
Namibia
-
Nepal
-
Netherlands
-
New Zealand
-
Nigeria
-
North Macedonia
-
Norway
-
Oman
-
Pakistan
-
Palestine
-
Panama
-
Papua New Guinea
-
Paraguay
-
Peru
-
Philippines
-
Poland
-
Portugal
-
Puerto Rico
-
Qatar
-
Reunion
-
Romania
-
Rwanda
-
Saudi Arabia
-
Serbia
-
Singapore
-
Slovakia
-
Slovenia
-
Somalia
-
South Africa
-
Spain
-
Sri Lanka
-
Sweden
-
Switzerland
-
Syria
-
Taiwan
-
Tajikistan
-
Tanzania
-
Thailand
-
Trinidad and Tobago
-
Tunisia
-
Turkey
-
UAE
-
Uganda
-
Ukraine
-
United Kingdom
-
United States
-
Uruguay
-
Uzbekistan
-
Venezuela
-
Vietnam
-
Yemen
-
Zambia
-
Zimbabwe
- Forex
- Crypto
