UK short-term inflation expectations fell to 3.2% in May

The British population's expectations regarding medium-term inflation remained at their highest level in recent years. Meanwhile, short-term forecasts decreased, according to the Bank of England's survey published ahead of its interest rate decision this week.

The regulator closely examines inflation expectations among the population and investors, Reuters reports. This allows the Bank of England to assess whether UK citizens will seek wage increases and determine their willingness to purchase goods and services at higher prices.

According to the May survey, inflation expectations for the five-year period remained at 3.6%, unchanged from February's figure, which was the highest since November 2019.

Forecasts for the rate of price growth in one to two years remained at 3.2%, the highest since November 2022. Meanwhile, the population's estimated one-year inflation rate decreased from 3.4% to 3.2%.

UK consumer prices rose 3.5% in April, up from 2.6% in March.