The British public’s expectations for inflation fell again in July, a survey showed, potentially adding to the case; for the Bank of England (BoE) to increase interest rates by only a quarter percentage point later this week.
U.S. bank Citi and pollsters YouGov said expectations for inflation in five to 10 years’ time dropped to 3.8% in July from 4.0% in June, the third fall in the last four months.
Inflation expectations for 12 months’ time edged down to 6.0% from 6.1%, the survey showed.
The BoE’s Monetary Policy Committee which has raised interest rates steadily since December to fight an inflation rate; now above 9%, has said it is ready to act forcefully if needed to stop the recent price surge from becoming embedded.
That has raised the prospect of the first half percentage-point BoE rate hike since 1995, after its August policy meeting.