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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 Market Analyst, UK & EMEA at OANDA
Based in London, Craig Erlam joined OANDA in 2015 as a market analyst. With many years of experience as a financial market analyst and trader, he focuses on both fundamental and technical analysis while producing macroeconomic commentary. His views have been published in the Financial Times, Reuters, The Telegraph and the International Business Times, and he also appears as a regular guest commentator on the BBC, Bloomberg TV, FOX Business and SKY News. Craig holds a full membership to the Society of Technical Analysts and is recognised as a Certified Financial Technician by the International Federation of Technical Analysts.
Craig Erlam

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