UK long-run inflation expectations near 15-month high in September, Citi/YouGov survey shows
12-month inflation expectations rose to 4.5% from 3.9% in August; long-term expectations rose to 4.3% from 4.1%.
S. bank Citi and pollsters YouGov showed on Monday. 1% — the highest since June 2025, excluding March. "This leaves the series only 15 basis points from its peak in March and, excluding the March print, the highest the series has been since June 2025," Citi said.
The BoE is watching closely for signs that the jump in energy prices caused by the Iran war could turn into longer-lasting inflation pressures. Citi noted a divergence between its poll of just over 2,000 British households and other inflation expectations surveys like the BoE's Decision Maker Panel of businesses. "Looking at the year-ahead series, the spread between Citi/YouGov and DMP was, as of August, 86 bps — well above the historical average of 16 bps," Citi said. August's difference in expectations was close to a record and the difference was likely to be even wider after the BoE published its next data, the bank added.
Citi said it was unclear if the BoE would place more weight on the views of businesses which set prices or on household views which can influence pay demands but are sensitive to short-term rises in energy and food prices. "On balance we think the latter remains more likely as a hedge against future inflation, even as the evidence for widespread price pressure at this point in time remains more limited," Citi said. social)