© Reuters. FILE PHOTO: Shoppers walks past sale signage on Regent Street during the Boxing Day sales, in London, Britain, December 29, 2023. REUTERS/Isabel Infantes/File Photo
LONDON (Reuters) -The British public’s expectations for inflation increased in January on worries about disruption to shipping, according to a survey published by Citi/YouGov on Friday.
Public expectations for inflation for the 12 months ahead rose to 3.9% in January from 3.5% in December, reversing December’s drop, the survey said. At 3.9%, expectations have returned to where they were in November.
Long-term inflation expectations for the next 5 to 10 years rose to 3.6% from 3.4%.
The Bank of England kept interest rates at a nearly 16-year high on Thursday but opened up the possibility of cutting them as inflation falls, although it too warned of the risks from trade disruption.
The Bank said there were material inflation risks from “developments in the Middle East and from disruption to shipping through the Red Sea.”
A UK survey released this week showed that manufacturers had been hit by inflation stemming from tensions in the Red Sea, where attacks by Iranian-backed Houthi militants have disrupted global shipping.
