LONDON (Reuters) -British households’ expectations for inflation ended a run of increases and fell in January, according to a monthly survey published by Citi and YouGov on Thursday.
The survey showed expectations for inflation in a year’s time fell to 3.5% in January from 3.7%.
For five to 10 years’ time, expectations eased to 3.7% from 3.9%.
The Bank of England, which is expected to cut interest rates later on Thursday, is watching inflation expectations among other measures of price pressures in the economy.
Citi said its survey figures represented a relief after their recent climb and expectations for inflation ahead appeared to remain anchored.
“However, the level of these data remains concerning. Following several years dominated by adverse supply shocks, bad news now seems to be seen through an inflationary lens,” Citi economist Benjamin Nabarro said.
“With headline inflation set to accelerate markedly over the coming months, uncertainty around underlying inflation dynamics is likely to remain elevated for some months yet,” he said.
(Reporting by William JamesEditing by William Schomberg)
