Inflation expectations highest since 1992

LONDON (Reuters) - Britons' expectations of inflation in two years shot up to 4.7 percent in June, the highest level since 1992, from 4.2 percent in March, a survey published by Barclays Capital showed on Wednesday.

The Barclays Survey of Inflation Expectations (BASIX) also showed people expected prices to gain 4.4 percent over the next 12 months, up 0.7 percentage points from March. That was also the highest reading in 16 years.

"What is interesting is all measures of consumer inflation perceptions are going up. This will be a key issue for the Monetary Policy Committee at its upcoming policy decision," said George John, economist at Barclays Capital.

The quarterly survey polls 1,900 people across the UK.

Actual inflation hit a series high of 3.3 percent in May, according to official data published on Tuesday.

Bank policymakers are concerned that soaring food and fuel prices are not only boosting the current rate of inflation but also raising expectations of higher inflation ahead, which could in turn feed into higher wage demands, setting off an inflationary spiral.