LONDON (Reuters) -The British public’s expectations for inflation over the next year remained broadly stable at 2.7% in July compared with 2.6% in the previous month, a monthly Citi/YouGov survey said on Thursday.
Expectations for inflation five to 10 years ahead were 3.1%, slightly above the 3% for June, the survey found.
Earlier on Thursday, the Bank of England cut interest rates from a 16-year high after a tight vote by its policymakers who were split over whether inflation pressures had eased sufficiently.
Inflation returned to the BoE’s 2% target in May and stayed there in June, down from a 41-year-high of 11.1% struck in October 2022.
“With inflation now back at target, the recent pattern in (inflation expectations) data suggest a close correlation between realized and expected inflation remains intact,” Citi economist Benjamin Nabarro said.
“For the (BoE), this should provide further encouragement that second round effects are continuing to fade in a relatively symmetric fashion, consistent with fading wage and domestic price pressures in the forward-looking data.”
(Reporting by Sachin Ravikumar)
