September 6, 2019 / 8:37 AM / 12 days ago

UK public expectations for inflation in coming year hit almost six-year high: BoE

FILE PHOTO: People walk through the financial district of Canary Wharf, London, Britain 28 September 2017. REUTERS/Afolabi Sotunde/File Photo

LONDON, (Reuters) - The British public’s expectations for inflation in the coming 12 months hit an almost six-year high in August, but fell sharply for the longer-term, a Bank of England survey showed on Friday.

Gauges of public inflation expectations have risen sharply of late, reflecting the fall in the value of the pound as the Brexit crisis escalates which raises the price of imported goods.

Inflation expectations for the year ahead stood at 3.3% in August, up from 3.1% in May and marking the highest level since November 2013, according to the survey from the BoE and market research firm TNS.

But for inflation in five years’ time, expectations fell to 3.1% from 3.8% in May, their lowest level since November 2016 and the biggest drop between surveys since records started in 2009, the BoE/TNS survey showed.

The proportion of Britons who see interest rates rising in the next 12 months fell to 43% from 49% in May, the BoE said.

The survey of 2,110 people took place between July 31 and Aug. 4.

Reporting by Andy Bruce, editing by William Schomberg

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