MNI: UK Inflation Expectations Edge Higher In Nov: BOE Data

By David Robinson

     LONDON (MNI) - The Bank of England's quarterly survey showed UK inflation

expectations edged higher in November with median year ahead expectations rising

to 2.9% from 2.8% in August and two year ahead ones rising to 2.9% from 2.7%.

     Respondents reckoned inflation for the past 12 months was 2.9%, so their

one year and two year expectations were for it to flat-line, before rising to

3.5% in five years' time. The BOE Monetary Policy Committee has repeatedly

referred to inflation expectations remaining anchored, although with the

inflation target at 2.0% consumers are anticipating a persistent overshoot.

     The MPC's own forecasts show headline CPI falling very gently back towards

the 2.0% target, reaching 2.1% in three years' time on its market rate forecast.

     In all 42% of respondents said that they expected interest rates to rise

over the next 12 months, unchanged from August, with just 4% anticipating a

fall.

--MNI London Bureau; tel: +44 203-586-2223; email: david.robinson@marketnews.com

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