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U.K. Inflation Expectations Risk Getting Dislodged, BOE Says

U.K. inflation expectations risk becoming dislodged because consumer-price growth has been elevated for such a long time, Bank of England economists said.

“The prolonged period of above-target inflation could cause inflation expectations to become less well anchored,” the researchers wrote in an article in the central bank’s Quarterly Bulletin, published in London today. “That could trigger changes in the nominal exchange rate, and affect consumption and investment decisions, as well as wages and prices, and could cause inflation to persist above the target for longer.”