UK inflation expectations hit almost seven-year high- Citi/YouGov

FILE PHOTO: A statue is silhouetted against the Bank of England in the City of London, Britain, December 12, 2017. REUTERS/Clodagh Kilcoyne/File Photo

LONDON (Reuters) - The British public’s expectations for inflation in the longer term jumped last month to their highest level in almost seven years, a survey showed on Monday.

Expectations for inflation in five to ten years’ time rose to 3.6% in September from 3.2% in August, the highest since November 2013, Citi and pollsters YouGov said.

For one year ahead, expectations rose to 3.2% from 3.0% in August.

“It is unclear what is behind the uptick. The increase is broad based across subgroups. Brexit uncertainty has previously tended to drive inflation expectations higher,” Citi analysts said.

“However, Covid related reconfiguration might also be playing a role. A rotation in demand implies price increases in some areas and reductions in others – the first group may be having a disproportionate impact.”

Reporting by Andy Bruce and William Schomberg