Household expectations for inflation over the next year hit their highest level in October since the 2008 financial crisis, a survey by Citigroup and YouGov showed on Tuesday.
According to the survey, households now expect inflation to reach 4.4% over the next year, which is a 0.3 percentage point increase on September’s reading.
Expectations for the next five to 10 years were steady at 3.7%, having increased sharply in August and September, but remained at the highest level since the second quarter of 2013.
Figures released last week by the Office for National Statistics showed that consumer price inflation dipped to 3.1% in September from 3.1% in August, versus expectations for it to remain unchanged. Still, it remains well above the Bank of England’s target of 2%.
The BoE is due to make its latest policy announcement next Thursday. Last week, the Bank’s new chief economist Huw Pill told the Financial Times that inflation was likely to hit or exceed 5% by early next year.
