Inflation Expectations Fall Across All Time Horizons

According to the latest Bank of England survey, UK consumers' inflation expectations have fallen across all time horizons in August.

The median expectations 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%. Longer-term expectations, covering roughly five years ahead, fell to 3.2% from 3.9%.

The respondents estimated the current inflation rate at 4.9%, marginally lower than the 5.0% recorded in May.

Expectations for interest rates also softened slightly, with 51% of respondents predicting rates would rise over the next 12 months, compared to 53% in May.