BoE Survey: UK Inflation Expectations Fall Across All Time Horizons

UK consumers' inflation expectations have fallen across all time horizons in August, according to the latest Bank of England survey. The median expectation for inflation over the coming year dropped to 3.2% from 4.0% in May, while expectations for the following 12 months declined to 2.9% from 3.5%. Long-term expectations, covering roughly five years ahead, fell to 3.2% from 3.9%, a Bank of England survey found.

The survey also showed that respondents estimated the current inflation rate at 4.9%, marginally lower than the 5.0% recorded in May. Expectations for interest rates softened slightly, with 51% of respondents predicting rates would rise over the next 12 months, compared with 53% in May.

The Bank of England highlighted that a change in survey provider made direct comparisons with May difficult. Savanta had taken over the Inflation Attitudes Survey from Ipsos in August, and a parallel survey in May showed inflation expectations were already lower under Savanta's methodology.