LONDON Britons' expectations for inflation in the coming year picked up to 3.3 percent in November, the highest in more than two years, a survey by Citi/YouGov showed on Wednesday.
November's reading is up from 3.0 percent in October and well above the Bank of England's 2 percent inflation target.
Citi economist Michael Saunders said the rise in inflation expectations dented the credibility of the target, and made it unlikely that the central bank would expand its quantitative easing programme unless the economic outlook deteriorated sharply.
"The Montary Policy Committee should be worried by the rise in inflation expectations. The credibility of the inflation target clearly is being eroded," he said.
"This is perhaps not surprising given the repeated overshoots of inflation versus the target and versus the MPC's forecasts in recent years, as well as the MPC's habit of responding to repeated overshoots with excuses about 'one offs' rather than policy changes."
British consumer price inflation has been above target all this year and the central bank expects it to remain so throughout 2011, but to fall below target at the two-year horizon on which policy is based.