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UK inflation expectations rise to 5-month high: Citi/Yougov

[LONDON] Expectations among people in Britain for inflation over the coming year rose to their highest level in five months in January, according to a survey which followed a pick-up in official inflation data from below zero.

The monthly YouGov/Citi survey, published on Monday, found year-ahead inflation expectations rose to 1.5 per cent from 1.3 per cent in December.

Expectations for inflation over the next five to 10 years also rose to 2.9 per cent from 2.7 per cent, hitting their highest level since October 2014.

Michael Saunders, chief UK economist at Citi, said inflation expectations remained low compared with averages. "However, with the jobless rate close to 5 per cent and the level of job vacancies at a record high, the Monetary Policy Committee is likely to be highly sensitive if clear evidence emerges that inflation expectations are trending higher and that this is feeding through to pay growth," he said.