LONDON (Reuters) – The British public’s long-term expectations for inflation slumped to a record low in May as the coronavirus hit the economy, a quarterly Bank of England survey showed on Friday.
The BoE said the public’s average estimate for inflation in five years’ time fell to 2.6% in May from 3.4% in February, the lowest since the survey began in 2009.
Expectations for inflation in two years’ time tumbled to 1.9% from 2.9%, matching a record low set in February 2009, while inflation expectations for the year ahead edged down to 2.9% from 3.0%.
The BoE looks at public inflation expectations as a guide to the likely future inflation pressure from wage demands and businesses’ price-setting decisions.
The BoE is expected to announce a fresh increase of at least 100 billion pounds in its bond-buying firepower next week.
The data comes from an online survey of nearly 2,500 people conducted May 12-17, rather than the usual face-to-face interviews, which the BoE said could have affected survey results.
UK public inflation expectations slump due to COVID, BoE says
Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.