British public expectations for long-term inflation rose to a record high last month after the U.S.-Israeli war on Iran pushed up energy prices, according to the Bank of England’s quarterly inflation attitudes survey released Friday.
The survey showed that median expectations for inflation over the next 12 months increased to 4%, up from 3.2% in February, reflecting growing concern among households about persistent price pressures.
Expectations for inflation five years ahead also rose, reaching 3.9% in May compared with 3.7% in February. That marks the highest level since the Bank of England began tracking the series in 2009 and remains well above the central bank’s 2% inflation target.
Bank of England policymakers closely monitor inflation expectations as an indicator of whether price pressures risk becoming entrenched in consumer behavior, potentially complicating efforts to bring inflation back to target through monetary policy.
The latest data suggests households remain wary of sustained cost-of-living pressures despite easing headline inflation in recent months, with energy market volatility continuing to influence sentiment.
