British public expectations for inflation in coming year hit almost 6-year high: Bank of England

Gauges of public inflation expectations have risen sharply of late, reflecting the fall in the value of the pound as the Brexit crisis escalates which raises the price of imported goods. PHOTO: AFP

Updated

Published

Sep 06, 2019, 04:57 PM

LONDON (REUTERS) - The British public's expectations for inflation in the coming 12 months hit an almost six-year high in August, but fell sharply for the longer term, a Bank of England survey showed on Friday (Sept 6).

Gauges of public inflation expectations have risen sharply of late, reflecting the fall in the value of the pound as the Brexit crisis escalates which raises the price of imported goods.

Inflation expectations for the year ahead stood at 3.3 per cent in August, up from 3.1 per cent in May and marking the highest level since November 2013, according to the survey from the BoE and market research firm TNS.

But for inflation in five years' time, expectations fell to 3.1 per cent from 3.8 per cent in May, their lowest level since November 2016 and the biggest drop between surveys since records started in 2009, the BoE/TNS survey showed.

The proportion of Britons who see interest rates rising in the next 12 months fell to 43 per cent from 49 per cent in May, the BoE said.

The survey of 2,110 people took place between July 31 and Aug 4.