–Barclays Q4 BASIX: Yr Ahead Inf. Expectations 3.2% Vs 2.5% Q3; 3.4% Q2
–Barclays BASIX: 2Y Ahead Inflation Expectations 3.6%: 5yr At 4.0%
LONDON (MNI) – The UK public’s inflation expectations rebounded
in the fourth quarter, and are well above the Bank of England 2.0%
inflation target, according to the Barclays BASIX survey.
With CPI currently running above 3.0%, and forecast to stay well
above 2.0% throughout next year, the BOE’s Monetary Policy Committee has
cited rising inflation expectations as an upside risk, although the
majority has continued to back unchanged policy.
The latest BASIX survey shows the public expects inflation will be
3.2% a year ahead, 3.6% two years ahead and at 4.0% in five years.
The BASIX outturns have been volatile. Its Q3 survey showed year
ahead inflation expectations plunged to 2.5% from 3.4% in Q2, but other
expectation surveys found no evidence of this fall.
“The fact that the public does not envisage a return of inflation
to target over the next few years is a cause for concern, and suggests
that the MPC’s argument that the rise in inflation is temporary has not
hit home,” Simon Hayes, economist at Barclays, said in a note.
–London newsroom 4420 7862 7491; email: drobinson@marketnews.com
[TOPICS: MT$$$$,M$B$$$,M$$BE$]
