MNI: UK Public Expects Infla To Hold Steady, Above Target: BOE

-Year Ahead Feb Median Inflation Expectations 2.9%; Unch Vs Nov

by Jai Lakhani

     LONDON (MNI) - The UK public still expects inflation to flat-line for a

couple of years at a level markedly above the Bank of England's 2% inflation

target, the latest BOE/TNS survey found.

     In the February TNS survey, conducted for the central bank, public

expectations for inflation a year ahead were 2.9% and 2.9% for the year after

that before rising to 3.4% in five years' time. These were barely changed from

November, with year ahead expectations back then 2.9% and also 2.9% for two

years' ahead, with five year out expectations at 3.5%.

     The picture that emerges from the BOE survey is that public inflation

expectations remain elevated as headline inflation holds around 3.0%, and that

the public expectations are only modestly higher to the BOE's own central

projections.

     In the February Inflation Report, the BOE forecast that headline CPI

inflation would peak in Q1, and would dip but hold above the 2% target

throughout the three year forecast horizon.

--MNI London Bureau; tel: +44 203-586-2225; email: les.commons@marketnews.com

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