Saturday, October 23, 2021

UK public inflation expectations will remain high in August: BoE survey

LONDON: British public expectations for inflation rose last month but remained within levels seen since the start of the COVID-19 pandemic, despite a recent surge in headline inflation, a Bank of England report said. The survey showed Friday.

According to the survey conducted by market research firm Kantar, inflation expectations for the coming year rose to 2.7 per cent in August from 2.4 per cent in May. They have placed in the range of 2.4 per cent to 2.9 per cent since the start of the COVID-19 pandemic.

Long-term inflation expectations rose to 3.0 per cent from 2.7 per cent in May, their highest since February 2020 – not long before Britain went into its first COVID-19 lockdown.

The BoE is keeping a close watch on inflation expectations gauges to ensure that recent price increases, due to global supply chain problems, are not adding to the collective psyche of the British consumer.

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Official data earlier this week showed a record month-on-month jump in the annual rate of consumer price inflation, reaching a nine-year high of 3.2 per cent in August – well above the BoE’s 2 per cent target.

The central bank will set its latest views on inflation outlook next Thursday after the September meeting of its Monetary Policy Committee.

The BoE is still set for inflation to reach 4% later this year due to higher energy prices and pandemic odds, which it expects to fade through 2022.

“It mostly just appears to be reversal to pre-Q2 levels, nowhere near ‘de-anchoring’ territory,” Alpesh Pleja, chief economist at the Confederation of British Industry, said of the BoE survey findings on Friday.

“Still, (this) is something the bank will keep a close eye on.”

by Andy Bruce

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This News Originally From – The Epoch Times

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