MNI BRIEF: UK Consumer L-T Inflation Expectations At New High

Higher UK inflation prints are pushing household future price expectations even higher, with the outlook for the next 12 months rising to a record high 6.1%, according to the latest Citigroup/YouGov Inflation Tracker -- more than 3 percentage points above their long-term average.

Long-run expectations (5-10 years ahead) rose to 4.4% – also a new all time high -- with Citibank analysts suggesting a growing risk that expectations could become de-anchored, although it still isn't their baseline expectation, with no clear evidence of a break either in these data nor wider economic behavior. However, with further energy cost increases expected in coming months, household reactions to surging prices will be key for the Bank of England when setting policy.