The British public’s expectation for inflation over the next 12 months fell to its lowest in more than 16 years, a Bank of England survey showed on Friday, raising the risk that below-target price growth may become entrenched.
The average expectation for inflation over the coming year among more than 4,000 people polled for the BoE last month sank to its lowest since November 1999 at 1.8 percent, down from 2.0 percent in November 2015.
British consumer price inflation has been below the BoE’s 2 percent target for two years and last year it was zero, the lowest since comparable records began in 1950. The BoE expects it to stay below 1 percent throughout 2016, as the effect of last year’s sharp fall in oil prices fades slowly.
Annual consumer price inflation is currently 0.3 percent.