-BOE Survey: Year Ahead Inflation Expectations 3.5% vs 3.2% in Aug
LONDON (MNI) – Near and longer term inflation expectations have
picked up, according to the Bank of England’s quarterly survey,
following the spike in consumer price inflation to 2.7% on the year in
October from 2.2% in September.
Year ahead inflation rose to 3.5% in the November survey, from 3.2%
in August while five year ahead inflation expectations rose to 3.6% from
3.1% in August. Two year ahead expectations were up to 3.2% from 2.8%.
The five year expectations reading was the joint highest on record.
Some Bank of England Monetary Policy Committee members have
repeatedly highlighted the risk of inflation expectations becoming
de-anchored from the 2.0% target, with the protracted run of above
target inflation outturns.
Crucially for policy setting, however, inflation expectations have
not fed through to wage growth in recent years, which has been very
subdued by historic standards.
The public also believes inflation is actually running well above
its actual level. Asked to give the current rate of inflation, the
median response was 4.4%, up from 4.1% in August.
— London newsroom: 44 20 7862 7491; email: drobinson@marketnews.com
[TOPICS: M$$BE$]
