UK inflation expectations hit 6-year low in January: Citi/YouGov

[LONDON] The British public's expectations for inflation in the next 12 months fell to their lowest level in six years in January, while longer-term inflation expectations hit a record low, according to a survey on Tuesday.

The monthly Citi/YouGov survey found year-ahead inflation expectations fell to 1.2 per cent in January from 1.5 per cent in December, the lowest level since January 2009.

Expectations for inflation over the next five to 10 years fell to 2.6 per cent from 2.7 per cent in December, marking a new record low.

"On the whole, we regard the drop in inflation expectations as positive for growth, because it will translate into higher real income expectations," said Michael Saunders, economist at survey sponsor Citi.

Official data showed British consumer price inflation plunged to its lowest level since May 2000 last month and Bank of England Governor Mark Carney has said it could turn negative in the next few months.

REUTERS