U.K. Inflation Expectations Jump to Highest Level Since 2013By
U.K. consumers’ inflation expectations have started to rise again after steadying in recent months, according to Citigroup.
Its monthly report, conducted with YouGov, shows one-year expectations picked up to 2.8 percent in October, the highest in four years. Longer-term expectations -- for 5-10 years -- also rose, edging up to 3.2 percent.
As the Bank of England prepares for its crunch policy meeting next week, Citi said the report will “at the margin raise concerns about second-round effects” from headline inflation, which hit 3 percent last month. It may also “strengthen the MPC’s resolve” to increase its benchmark interest rate on Nov. 2, it said.
Market pricing on a hike next week rose earlier on Wednesday after data showed the economy grew 0.4 percent in the third quarter, a little better than economists had forecast.