–BOE: May Median Year Ahead Inflation Expectations 3.9% Vs 4.0% Feb
–BOE/GFK: Public See Current Inflation at 4.5% Vs 4.4% in Nov
–BOE/GFK: May Longer Term Inflation Expectations 3.3% vs 3.5% in Feb
LONDON (MNI) – The public’s inflation expectations eased a touch
despite high headline inflation, the latest Bank of England/GfK NOP
survey found.
The May survey found year ahead inflation expectations eased to
3.9% from 4.0% in the February survey.
But when asked what the current rate of inflation was, respondents
gave a median answer of 4.5% – the highest level since November 2008 and
above the 4.4% seen in February.
BOE Monetary Policy Committee members have repeatedly cited the
risk of inflation expectations moving up in line with high headline
outturns, although there is an ongoing debate on the likelihood of
this translating into higher pay settlements.
These latest GfK/NOP survey figures showed not just year ahead, but
also longer-term inflation expectations easing.
The median response for longer term, “say in five years time”,
inflation slipped to 3.3% from 3.5% in February. The public’s median two
year ahead inflation forecast was 3.2% compared with 3.4% in February.
The survey also found the public still expects to be hit by higher
interest rates, but the balance of those expecting a hike dropped
sharply. In all, 55% of respondents expected rates to rise over the next
12 months, down from 62% in November.
–London newsroom: 4420 7862 7491; email: ukeditorial@marketnews.com
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