LONDON (Reuters) - The British public’s expectations for inflation over the next 12 months rose only slightly in June, a survey for Citi by polling company YouGov showed, in welcome news for Bank of England policymakers who are holding off on raising interest rates.
“Expectations are close to long-run averages, but strong upward momentum that would call for urgent monetary tightening is absent, in our view,” Citi economist Christian Schulz said in a note to clients on Friday.
Despite Britain’s official inflation rate hitting a nearly four-year high of 2.9 percent in May, respondents to the poll said they expected inflation next June to be 2.62 percent, a 0.05 percentage-point rise from last month’s survey.
Longer-term inflation expectations for the next five to 10 years rose to 3.1 percent, up from 3.0 percent in May but below February’s 3.2 percent peak, Citi said.
YouGov polled 2,095 adults on June 20 and 21.
Last week, the BoE’s policymakers voted 5-3 in favour of keeping interest rates at a historic low of 0.25 percent, a narrower vote than expected.
BoE Governor Mark Carney sought to counter speculation about a rate hike on Tuesday by saying he wanted to see the impact of Brexit on the economy over the coming months, despite a strong rise in inflation.
But the Bank’s chief economist, Andy Haldane, said on Wednesday he was likely to vote for a rate hike in the second half of this year, barring a further slowdown in the economy.
Writing by William Schomberg; editing by Costas Pitas