UK Public Inflation Expectations Ease Further In July

• The British public's expectations for future inflation continued to fall in July, ​according to a survey from U.S. bank, Citi, ‌and pollsters YouGov that could help to reduce worries at the Bank of England (BoE) about price pressures in the economy.
• Expectations for inflation ​in five or more years, which are closely watched ​by the BoE, fell to 3.7% in July from 3.9% ⁠in June, the survey released on Tuesday showed. Year-ahead ​expectations, which tend to be influenced by moves in short-term ​inflation and energy prices, decreased to 3.4% from 3.8%.
• The BoE's policymakers routinely monitor inflation expectations for signs that price pressures could become ​embedded among consumers as well as businesses.
• The surge in ​energy costs triggered by the Iran war prompted the central bank ‌to pause its run of interest rate increases earlier this year. "Like with gas prices, there remains a risk that a delayed increase in pump prices could trigger a small ​increase in expectations," Callum ​McLaren-Stewart, an ⁠economist at Citi, said. "But given pump prices react quickly to crude prices and the ​scale of the increase in July was ​well below ⁠what we saw in Q2, we think it is unlikely to have a meaningful impact."
• A survey of British firms ⁠published ​last week showed they were planning smaller ​price and wage rises. The BoE is expected to hold interest rates on Thursday.

(Source: Reuters)