London, United Kingdom. British public expectations for inflation declined in July, according to a survey by US bank Citi and pollsters YouGov.
Expectations for inflation in five or more years fell to 3.7 per cent from 3.9 per cent in June, while year-ahead expectations decreased to 3.4 per cent from 3.8 per cent.
Central bank monitoring
Bank of England policymakers monitor inflation expectations for indications that price pressures could become embedded among consumers and businesses.
The central bank paused its run of interest rate increases earlier this year after energy costs surged during the Iran war.
Fuel price risk
Callum McLaren-Stewart, an economist at Citi, said there was a risk that a delayed rise in pump prices could result in a small increase in inflation expectations.
However, he said pump prices respond quickly to crude oil prices and that the increase in July was well below the level seen in the second quarter, making a meaningful impact unlikely.
Business expectations
A survey of British firms published last week showed that companies were planning smaller increases in prices and wages.
