Public inflation expectations in Britain rose in August, reversing course after falling in recent months, according to a survey from U.S. bank Citi and pollsters YouGov published on Tuesday.
Expectations for inflation over the next 12 months jumped to 3.9% from 3.4% in July. Expectations for longer-term price growth increased to 4.1% from 3.7%, their highest level since April.
"With inflation set to pick up over the coming months, this is a hawkish development in this series," Citi said.
The Bank of England is watching closely for signs that the jump in energy prices caused by the Iran war could turn into longer-lasting inflation pressures.
Citi said it was wary of over-interpreting one report in isolation and that "next month's release should give a better steer on how to interpret this jump."
Writing by William Schomberg; Editing by Mark Porter
