LONDON -Expectations among the British public for inflation over the next year fell for the first time in six months in November and were steady looking further ahead, according to a survey by Citi and polling firm YouGov.
With the Bank of England keeping a close eye on the risk of a recent jump in inflation becoming self-reinforcing, the survey showed expectations for price growth over the next 12 months receded to 4.0% from 4.4% in October.
Expectations for inflation in five to 10 years' time held at 3.7%.
Both measures remained above their historical averages.
"Today's data, especially the level of long-term expectations, suggest a continued risk inflation expectations could become de-anchored to the upside - however this risk does now seem to be easing," Citi analysts said.
Britain's main consumer price index hit a 10-year high of 4.2% in October and the BoE has said it expects it will rise to around 5% in the second quarter of 2022. The British central bank has said increases in interest rates are likely in coming months if the economy performs as it has forecast.
But investors cut their bets on a rate hike as soon as the BoE's December meeting on Friday after a coronavirus variant that might be harder to combat with vaccines was detected in South Africa.