LONDON (Reuters) -The British public’s expectations for inflation over the next 12 months fell to 3.7% in November from 4.2% the previous month, a survey by YouGov for the U.S. bank Citi showed on Wednesday.
Citi said the reading could boost the chances of a December rate cut by the Bank of England, after British inflation slowed last month for the first time since May.
Long-term inflation expectations also fell to 3.9% in November from 4.2% in October, Citi’s monthly survey showed.
“If this downgrade is replicated, both over time and across the various inflation expectation surveys, we think it could challenge the idea prevalent in the MPC that expectations are an ongoing barrier to both a lower terminal rate and a faster pace of cuts,” Citi economists wrote.
The BoE had paused its quarterly pace of rate cuts earlier this month, over wariness about sticky high inflation, although it was by a narrow margin, with the central bank’s Monetary Policy Committee voting 5-4 against cutting rates in November.
Consumer price inflation dropped to 3.6% in October from 3.8% in September, its joint-highest since January 2024, the Office for National Statistics said on November 19.
(Reporting by Muvija M, writing by Sarah Young; Editing by Kate Holton)
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