UK Inflation Expectations Ease Further in July, BoE Likely to Hold Interest Rates

The British public's inflation expectations have eased further in July, according to a survey conducted by Citi and YouGov.

Expectations for inflation in five or more years' time fell to 3.7% from 3.9% in June, while year-ahead expectations decreased to 3.4% from 3.8%.

The Bank of England's policymakers closely monitor inflation expectations to gauge potential price pressures in the economy.

Callum McLaren-Stewart, an economist at Citi, noted that a delayed increase in pump prices could trigger a small increase in expectations, but this is unlikely given the scale of the recent increase and the speed at which pump prices react to crude prices.