–June Year-Ahead Inflation Expectations 3.0% Vs 2.8% in May
–Longer Term Inflation Expecations 3.3% Vs 3.1% in May
LONDON (MNI) – UK inflation expectations rose again in June, with
year ahead expectations hitting their highest level since September
2008, according to the latest YouGov/Citi survey.
Bank of England Monetary Policy Comittee member Adam Posen said
Wednesday that the rise in UK inflation appears to have fed through to
higher inflation outturns and the YouGov/Citi survey will add to
concerns about expectations becoming de-anchored from the BOE’s 2.0%
target.
The YouGov Citi survey put median year ahead inflation expectations
in June at 3.0%, up from 2.8% in May, and the highest outturn since
September 2008.
In all 82% of respondents, excluding ‘don’t knows’, expected
consumer prices to be above the 2% target a year ahead.
Longer-term inflation expectations, for 5-10 years ahead, rose to
3.3% in June from 3.1% in May.
In a speech at the Society of Business Economists Wednesday Posen
said “the most logical and empirically reasonable explanation for
inflation creep is some unanchoring of inflation expectations, caused by
the series of above target outcomes for UK inflation in recent years.”
Posen argued MPC members should be more open in acknowledging they
have backed ultra loose policy to avoid deflation and recession risks,
but one consequence has been above target inflation.
–London Newsroom: Tel:+44207 862 7491;email:drobinson@marketnews.com
[TOPICS: M$$BE$,MT$$$$,M$B$$$,MABDS$]
