LONDON (Reuters) - The British public’s expectations for inflation over the next 12 months rose slightly this month but remained within the tight range of the past six months, a survey for Citi by polling company YouGov showed on Wednesday.
“Stable short-term expectations show that the current spike in inflation is not self-reinforcing,” Citi economists wrote in a note to clients.
“There is no urgency to hike rates, in our view, and we expect the majority (of Bank of England policymakers) to avoid premature monetary tightening, given the economic risks.”
Citi said year-ahead inflation expectations increased to 2.6 percent from April’s reading of 2.5 percent, lagging behind a sharper increase in the official measure of headline consumer price inflation which hit a three-year high of 2.7 percent.
This was the first time since September 2013 that year-ahead inflation expectations were below the headline rate.
Longer-term inflation expectations for the next five to 10 years rose to 3.0 percent from April’s 2.9 percent, but remained below February’s 3.2 percent peak.
YouGov polled 2,017 British adults on May 19 and May 20.
Reporting by David Milliken; Editing by William Schomberg