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UK Public Inflation Expectations Drop to 16-Year Low – Bank of England

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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.

Reuters

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Craig Erlam

Craig Erlam

Senior Currency Analyst at OANDA
Based in London, England, Craig Erlam joined OANDA in 2015 as a Market Analyst. With more than five years' experience as a financial market analyst and trader, he focuses on both fundamental and technical analysis while conducting macroeconomic commentary. He has been published by The Financial Times, Reuters, the Wall Street Journal and The Telegraph, and he also appears regularly as a guest commentator on networks including Sky News, Bloomberg, CNBC and BBC. Craig holds a full membership to the Society of Technical Analysts and he is recognized as a Certified Financial Technician by the International Federation of Technical Analysts.
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