UK Inflation Expectations Slow Marginally In August

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Britons’ inflation expectations for the coming year slowed marginally in August, the quarterly Bank of England/Kantar Inflation Attitudes Survey showed on Friday.

The rate of inflation for the coming year is seen at 2.8 percent compared to 2.9 percent estimated in May. Meanwhile, expected inflation for the twelve months after that rose to 2.2 percent from 1.9 percent.

Median expectations for inflation in the longer-term, say in five years’ time increased to 2.8 percent from 2.6 percent.

Respondents assessed the current inflation at 2.6 percent versus 2.4 percent in May.

When asked about the future path of interest rates, 33 percent said they expected rates to stay about the same over the next twelve months and 31 percent expected rates to rise over the next 12 months.

Further, by a margin of 54 percent to 9 percent, survey respondents believed that the economy would end up weaker rather than stronger if prices started to rise faster.

About 42 percent of respondents thought the inflation target was ‘about right’, down from 55 percent in May. The survey was conducted by Kantar on behalf of BoE.

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