Inflation expectations hits record high in April

Fri Apr 25, 2008 1:52pm BST

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LONDON (Reuters) - Expectations of inflation in the next 12 months hit a record high in April, according to a survey released on Friday which will worry Bank of England policymakers concerned about rising price pressures.

The YouGov/Citigroup report showed people expected inflation to hit 3.8 percent, up from the 3.6 percent expected in March.

Inflation is currently already over the central bank's 2 percent target and is expected to rise further in the coming months because of soaring food and energy prices.

This is clearly boosting inflation expectations and policymakers are worried price rises will become self-fulfilling and spark off higher wage demands.

Hawkish Monetary Policy Committee members like Andrew Sentance, one of two policymakers who opposed this month's decision to cut interest rates, warned just this week about the danger of higher inflation expectations becoming entrenched.

(Editing by Gerrard Raven)

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