Inflation Expectations Ease Ahead of BOE Rate Decision
UK consumers' long-term inflation expectations continue to decline, falling to 3.7% for five years or more from June's 3.9%, according to a recent survey by Citi and YouGov.
The year-ahead expectations also dropped to 3.4% from 3.8%, providing fresh evidence that price pressures may be becoming less entrenched in the economy.
This development comes just before the Bank of England's interest rate decision on Thursday, which is expected to remain unchanged.
Economist Callum McLaren-Stewart at Citi noted that there remains a risk of a delayed increase in pump prices causing a small rise in expectations, but considers this unlikely due to the quick reaction of pump prices to crude moves and the smaller scale of July's increase compared with the second quarter.