UK Inflation Expectations Rise In August: BoE/Kantar Survey

Britons' inflation expectations for the coming year increased in August, the latest Bank of England/Kantar Inflation Attitudes Survey showed on Friday.

Inflation for the coming year was seen at 2.7 percent versus 2.4 percent in May. Inflation expectations for the twelve months after that climbed to 2.2 percent from 1.9 percent in the prior survey period.

For the longer-term, say in five years' time, inflation is expected to rise to 3 percent from 2.7 percent. Expectations remained above the central bank's inflation target of 2 percent.

By a margin of 46 percent to 13 percent, survey respondents believed that the economy would end up weaker, rather than stronger, if prices started to rise faster. This compares with margins of 41 percent to 13 percent in May.

About 31 percent of respondents expected interest rates to stay about the same over the next twelve months, compared with 37 percent in May and around 43 percent expected rates to rise over the next 12 months, up from 39 percent in May.

The quarterly survey was conducted by Kantar on behalf of the Bank of England, between August 10 and 16.

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