UK Households' Inflation Expectations Hit Highest Level in Over a Year

UK households' long-term inflation expectations have surged to their highest level in over a year, according to a joint survey by Citi and polling firm YouGov. The one-year-ahead inflation expectations rose to 4.5% in September, up 0.6 percentage points from 3.9% in August.

The long-term inflation outlook also climbed from 4.1% to 4.3%, marking the highest level since June 2025, excluding the peak recorded in March of this year. Citi noted that long-term inflation expectations are now within 15 basis points of the March peak.

The Bank of England (BOE) is currently monitoring whether the surge in energy prices triggered by the conflict between the US and Iran will evolve into more persistent inflationary pressure. The latest survey results indicate that households' inflation vigilance is intensifying.