UK Public Inflation Expectations Reach Record Highs After Iran War, Says BoE
Record Inflation Expectations Following Geopolitical Tensions
Impact of the U.S.-Israeli War on Iran
LONDON, June 12 (Reuters) - The British public's expectations for inflation in the long term rose to a record high last month after the U.S.-Israeli war on Iran sent energy prices soaring, the Bank of England's quarterly inflation attitudes survey showed on Friday.
Short-Term Inflation Expectations
The public's median expectation for the rate of inflation in the year ahead increased to 4% from 3.2% in February.
Long-Term Inflation Expectations
For inflation in five years' time, expectations rose to 3.9% in May from 3.7% in February - their highest level since BoE records for this time series began in 2009 and far above the BoE's target for consumer price inflation of 2.0%.
BoE's Response and Policy Considerations
BoE policymakers monitor the public's inflation expectations carefully for signs that price pressures are becoming permanently embedded in consumer behaviour.
(Reporting by Suban Abdulla, editing by Andy Bruce)
