January 29, 2020 / 1:28 PM / a month ago

UK public inflation expectations rise in January - Citi/YouGov

FILE PHOTO: A man is silhouetted as he walks past the Bank of England in the City of London, Britain, December 12, 2017. REUTERS/Clodagh Kilcoyne

LONDON (Reuters) - The British public’s expectations for inflation over the coming year rose this month after hitting a three-year low in December, a monthly survey showed on Wednesday, adding to signs of a post-election economic pick-up.

Expectations for inflation over the next 12 months rose to 2.5% in January from 2.3% in December, according to the survey by pollsters YouGov for U.S. bank Citi, which said the data reduced the chance of a Bank of England rate cut on Thursday.

“This may be indicative of a broader improvement in household growth and employment expectations as political indecisiveness ends and fiscal stimulus comes into view,” Citi said in a note to clients.

“Ahead of the finely balanced MPC meeting this week, this likely weighs against a cut in the near term,” they added.

Longer-term inflation expectations for the next five to 10 years increased to 3.1% from December’s 2.9%, at the top end of a narrow range they have been in since August.

YouGov polled 2,067 adults on Jan. 20 and Jan. 21.

Reporting by David Milliken, editing by Andy Bruce

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