LONDON (Reuters) -British households’ expectations for inflation rose in December, according to a survey published on Thursday that may add to concerns among investors about the slow pace of future interest rate cuts by the Bank of England.
The monthly Citi/YouGov survey showed expectations for inflation in a year’s time rose to 3.7% in December, Citi said, without providing a figure for November. In October, the reading stood at 3.3%.
For inflation in five to 10 years’ time, expectations rose to 3.9% from 3.6% in November, Citi said.
The BoE is trying to gauge how much inflation pressure remains in the British economy as it considers when to cut borrowing costs for only the third time since 2020.
Investors have sold British government bonds heavily in recent days, in part because they worry that inflation is likely to prove too high for the BoE to cut rates much this year, hurting economic growth and the government’s stretched finances.
Earlier on Thursday, a separate survey published by the BoE showed British businesses expected to raise prices as well as reduce staff numbers in response to an increase in employers’ social security contributions that will take effect in April.