UK Inflation Expectations Surge to 4.5% Amid Energy Price Worries

UK inflation expectations rose in September to their highest level since June 2025, excluding March, according to a survey from Citi and YouGov. The poll of over 2,000 British households showed that long-term public inflation expectations came close to their peak at 4.5% over the next 12 months, up from 3.9% in August.

The Citi/YouGov survey also found that expectations for price growth in the longer term rose to 4.3%, the highest since June 2025, excluding March. This has added pressure on the Bank of England as it considers whether to raise interest rates.

Citi noted a divergence between its poll and other inflation expectations surveys like the BoE's Decision Maker Panel of businesses, which showed a significant difference in expectations.