2 Min Read
LONDON (Reuters) - Britons' expectations of the average rate of inflation for the year ahead edged up to 2.8 percent in January from 2.7 percent in December, a monthly survey by polling company YouGov showed on Monday.
The poll - which is conducted on behalf of Citi - showed that over the next five to 10 years, Britons expected inflation to average 3.4 percent, up from 3.3 percent in December.
Both figures are in line with the long-run average since the survey started in 2005 but above the BoE Monetary Policy Committee's (MPC) 2 percent target, Citi said.
"Whether by luck or judgement, the general public's inflation expectations have, on average, been closer than the MPC's forecasts to the inflation outturns, correctly anticipating the persistent inflation stickiness," Citi economist Michael Saunders said.
"At present, we suspect that the general public's view of further inflation stickiness will again prove correct," he added. "Moreover, the Chancellor may well change the inflation target to make it easier for the MPC to tolerate such a persistent regulatory-driven inflation overshoot."
The poll of 2,413 people was conducted between January 21 and January 23. Consumer price inflation was 2.7 percent in December.
Reporting by David Milliken