Published by Global Banking & Finance Review®
Posted on January 10, 2025
2 min readLast updated: January 27, 2026
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UK inflation expectations rose to 3.7% in December, according to the Citi/YouGov survey, raising concerns about BOE's interest rate cuts.
LONDON (Reuters) -British households' expectations for inflation rose in December, according to a survey published on Thursday that may add to concerns among investors about the slow pace of future interest rate cuts by BOE-BANKS-e57d1808-2900-42bd-832f-d8f2baa8f262>the Bank of England.
The monthly Citi/YouGov survey showed expectations for inflation in a year's time rose to 3.7% in December, Citi said, without providing a figure for November. In October, the reading stood at 3.3%.
For inflation in five to 10 years' time, expectations rose to 3.9% from 3.6% in November, Citi said.
The BOE-e27aa96a-1849-4bf0-93aa-486e3a9568bc>BoE is trying to gauge how much inflation pressure remains in the British economy as it considers when to cut borrowing costs for only the third time since 2020.
Investors have sold British government bonds heavily in recent days, in part because they worry that inflation is likely to prove too high for the BOE-e27aa96a-1849-4bf0-93aa-486e3a9568bc>BoE to cut rates much this year, hurting economic growth and the government's stretched finances.
Earlier on Thursday, a separate survey published by the BOE-e27aa96a-1849-4bf0-93aa-486e3a9568bc>BoE showed British businesses expected to raise prices as well as reduce staff numbers in response to an increase in employers' social security contributions that will take effect in April.
(Reporting by Sachin Ravikumar and William Schomberg; Editing by Chris Reese)
The main topic is the rise in UK inflation expectations as reported by the Citi/YouGov survey, impacting BOE's interest rate decisions.
Inflation expectations for a year's time rose to 3.7% in December, and five to ten-year expectations increased to 3.9%.
The rise in inflation expectations may delay the BOE's interest rate cuts, affecting economic growth and government finances.
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