# UK inflation expectations show record jump in Sept -Citi/YouGov
Author:  Pal Sinha, Barnali 
Author URL: https://financedigest.com/author/pal-sinha-barnali
Published: 2021-09-21
Category: FINANCE
Category URL: https://financedigest.com/category/finance
Meta Title: UK Inflation Expectations Surge, BoE Hawkish Response Imminent
Meta Description: The British public's inflation expectations have surged to 4.1% for the coming year, signalling potential hawkish stance from Bank of England amidst
URL: https://financedigest.com/uk-inflation-expectations-show-record-jump-in-sept-citi-yougovhtml

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By David Milliken

LONDON (Reuters) – The British public’s expectations for inflation over the coming year have shot up by a record amount this month, raising the risk that the Bank of England will send a hawkish message soon, Citi said on Tuesday.

The Citi/YouGov monthly inflation expectations survey showed that public inflation expectations for the next 12 months jumped to 4.1% in September from 3.1% in August, the biggest monthly increase since the survey began more than 15 years ago.

Longer-term [inflation expectations](https://www.financedigest.com/dollar-drops-as-inflation-cools-more-than-expected.html "Dollar drops as inflation cools more than expected") for the next five to 10 years rose to 3.8% in September from 3.5% in August.

Today’s data, especially the movement in long-term expectations, suggest [growing risks inflation](https://www.financedigest.com/can-beijing-decouple-its-reopening-from-growing-inflation-in-2023.html "Can Beijing Decouple Its Reopening From Growing Inflation in 2023?") expectations could become de-anchored to the upside. The sharp [increase risks](https://www.financedigest.com/over-half-of-organisations-would-consider-using-cryptocurrencies-for-business-transactions-though-8-in-10-acknowledge-the-increased-risk-of-associated-ddos-attacks.html "Over half of organisations would consider using cryptocurrencies for business transactions, though 8 in 10 acknowledge the increased risk of associated DDoS attacks") a hawkish response from the (Monetary Policy Committee) this week,” Citi said.

The [BoE’s Monetary Policy Committee is meeting ahead](https://www.financedigest.com/sterling-steadies-vs-dollar-ahead-of-boe-ecb-meetings.html "Sterling steadies vs dollar ahead of BoE, ECB meetings") of its September policy statement on Thursday. Citi’s survey contrasts with a much smaller increase in [inflation expectations in a poll](https://www.financedigest.com/euro-zone-inflation-seen-just-above-ecbs-target-in-2025-poll-shows.html "Euro zone inflation seen just above ECB’s target in 2025, poll shows") for August which the BoE published last week.

Financial markets expect the BoE to start to [raise interest rates](https://www.financedigest.com/bank-of-england-raises-rates-to-3-5-says-inflation-has-peaked.html "Bank of England raises rates to 3.5%, says inflation has peaked") early next year, possibly as soon as February, though most economists think a move will only come towards the end of 2022.

The BoE looks closely at inflation expectations for signs the public expect above-average inflation over the medium term, which could lead to greater pressure for [pay rises](https://www.financedigest.com/unicredit-shareholders-urged-to-reject-ceo-orcels-pay-rise.html "UniCredit shareholders urged to reject CEO Orcel’s pay rise") and prompt businesses to raise prices in expectation of higher costs.

Inflation expectations tend to be pushed up by short-term [rises](https://www.financedigest.com/shares-rise-but-concern-mounts-over-inflation-flare-up.html "Shares rise, but concern mounts over inflation flare-up") in the current rate of inflation. Last month, consumer price [inflation jumped](https://www.financedigest.com/oil-jumps-on-lower-than-expected-us-inflation-data.html "Oil jumps on lower-than-expected US inflation data") to 3.2% from July’s 2.0%, and in recent days energy companies have warned of big rises in electricity and heating bills.

The Citi/YouGov survey was based on a poll of 2,005 adults on Sept. 20 and Sept. 21.

(Reporting by David Milliken; editing by Costas Pitas and Aurora Ellis)


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