Finance
UK inflation expectations were sticky even before iran energy shock, BoE survey shows
Published by Global Banking & Finance Review®
Posted on March 13, 2026
1 min readLast updated: March 13, 2026
Quick Summary
UK long‑term inflation expectations remained elevated at 3.7% in February—unchanged from November—suggesting persistent concerns among the public even before the Iran‑linked energy shock. Meanwhile, actual inflation is trending down toward the BoE’s 2% target, with January CPI at 3.0% and rate cuts
UK Inflation Expectations Remained High Even Before Iran-Driven Energy Shock
Analysis of UK Inflation Attitudes and Recent Economic Shocks
Persistent Long-Term Inflation Expectations
March 13 (Reuters) - The British public's expectations for inflation in the long term stayed stubbornly high last month even before the U.S.-Israeli war on Iran sent energy prices soaring, according to a Bank of England survey published on Friday.
Bank of England Survey Findings
The BoE's quarterly inflation attitudes survey showed the median expectation for inflation in five years' time was 3.7% in February, the same as in November.
Comparison with Previous Energy Shocks
That compares with 3.3% in February 2022, when Russia's invasion of Ukraine sparked the last energy price shock.
Implications for Monetary Policy
While the public are poor predictors of inflation, the BoE monitors their expectations carefully for signs that price pressures are becoming permanently embedded in the mindset of the public.
(Reporting by Andy Bruce; editing by Suban Abdulla)
Key Takeaways
- •Public five‑year inflation expectations held steady at 3.7% in February, higher than the 3.3% in February 2022 amid previous energy shocks, signaling entrenched inflation mindset despite anticipated disinflation. (moneyweek.com)
- •Despite inflation easing—with January CPI at 3.0%, down from 3.4% in December—the Bank of England remains cautious on rate cuts amid elevated expectations. (moneyweek.com)
- •The recent Iran‑Middle East conflict has heightened energy price risks, potentially derailing the projected disinflation path and complicating BoE’s inflation‑taming outlook. (uk.finance.yahoo.com)
References
Frequently Asked Questions about UK inflation expectations were sticky even before Iran energy shock, BoE survey shows
1What did the Bank of England's latest survey reveal about UK inflation expectations?
The BoE survey showed that long-term UK inflation expectations remained at 3.7% in February, unchanged from November.
2How do current inflation expectations compare to those from 2022?
Current expectations are higher at 3.7% compared to 3.3% in February 2022.
3Did recent energy price shocks impact the February survey results?
No, the survey was conducted before the recent Iran energy shock affected prices.
4Why does the Bank of England monitor public inflation expectations?
The BoE watches inflation expectations to spot signs of persistent price pressures becoming embedded in consumer mindset.
