Connect with us
Our website publishes news, press releases, opinion and advertorials on various financial organizations, products and services which are commissioned from various Companies, Organizations, PR agencies, Bloggers etc. These commissioned articles are commercial in nature. This is not to be considered as financial advice and should be considered only for information purposes. It does not reflect the views or opinion of our website and is not to be considered an endorsement or a recommendation. We cannot guarantee the accuracy or applicability of any information provided with respect to your individual or personal circumstances. Please seek Professional advice from a qualified professional before making any financial decisions. We link to various third-party websites, affiliate sales networks, and to our advertising partners websites. When you view or click on certain links available on our articles, our partners may compensate us for displaying the content to you or make a purchase or fill a form. This will not incur any additional charges to you. To make things simpler for you to identity or distinguish advertised or sponsored articles or links, you may consider all articles or links hosted on our site as a commercial article placement. We will not be responsible for any loss you may suffer as a result of any omission or inaccuracy on the website.

FINANCE

UK inflation expectations show record jump in Sept -Citi/YouGov

UK inflation expectations show record jump in Sept -Citi/YouGov 40

By David Milliken

LONDON (Reuters) – The British public’s expectations for inflation over the coming year have shot up by a record amount this month, raising the risk that the Bank of England will send a hawkish message soon, Citi said on Tuesday.

The Citi/YouGov monthly inflation expectations survey showed that public inflation expectations for the next 12 months jumped to 4.1% in September from 3.1% in August, the biggest monthly increase since the survey began more than 15 years ago.

Longer-term inflation expectations for the next five to 10 years rose to 3.8% in September from 3.5% in August.

“Today’s data, especially the movement in long-term expectations, suggest growing risks inflation expectations could become de-anchored to the upside. The sharp increase risks a hawkish response from the (Monetary Policy Committee) this week,” Citi said.

The BoE’s Monetary Policy Committee is meeting ahead of its September policy statement on Thursday. Citi’s survey contrasts with a much smaller increase in inflation expectations in a poll for August which the BoE published last week.

Financial markets expect the BoE to start to raise interest rates early next year, possibly as soon as February, though most economists think a move will only come towards the end of 2022.

The BoE looks closely at inflation expectations for signs the public expect above-average inflation over the medium term, which could lead to greater pressure for pay rises and prompt businesses to raise prices in expectation of higher costs.

Inflation expectations tend to be pushed up by short-term rises in the current rate of inflation. Last month, consumer price inflation jumped to 3.2% from July’s 2.0%, and in recent days energy companies have warned of big rises in electricity and heating bills.

The Citi/YouGov survey was based on a poll of 2,005 adults on Sept. 20 and Sept. 21.

 

(Reporting by David Milliken; editing by Costas Pitas and Aurora Ellis)

 

Continue Reading