UK Inflation Expectations Ease in May Following Peak
British households' one-year inflation expectations fell to 4.7% in May from a peak of 5.4% in March according to a Citi and YouGov survey. Longer-term expectations also softened to 4.0% as the initial price shock from the Iran conflict began to unwind.
United Kingdom consumer inflation expectations fell to 4.7% in May as the price shock from the conflict in Iran eased. This reading follows a peak of 5.4% in March after energy costs spiked. Lower expectations offer the Bank of England some comfort on inflation trajectory.
Households anticipate 4.7% inflation over the next year, down from 5.0% in April, per a Citi and YouGov survey. Long-term expectations also retreated to 4.0% from a peak of 4.5%. These figures suggest the inflationary impact of the Strait of Hormuz closure is fading.
