LONDON (Reuters) – The British public’s expectations for inflation over the next year fell to 3.1% in May, the lowest level since July 2021, a monthly Citi/YouGov survey said on Friday.
Expectations for inflation five to 10 years ahead fell sharply to 3.2% from 3.5%, the joint lowest level since March 2021, the survey found.
Citi said the readings would encourage the Bank of England’s Monetary Policy Committee, which is assessing how much inflationary pressure remains in the economy, as it considers when to cut interest rates for the first time since 2020.
“For the MPC, this should provide further encouragement that second round effects are continuing to fade in a relatively symmetric fashion, consistent with fading wage pressures in the forward-looking data,” Citi said.