LONDON, Feb 25 (Reuters) – The British public’s expectations for inflation over the coming year and further ahead fell sharply in February, according to a monthly survey by YouGov for U.S. bank Citi which was published on Wednesday.
Short-term inflation expectations fell to 3.3% in February from 3.8% in January, while long-term expectations fell to 3.6% from 4.1%.
“Despite the volatility in recent months, there may be cautious reason for optimism that the move this month may be something of a ‘level shift’,” Citi said in a note accompanying the survey results.
The bank said the survey was “clearly dovish” for Bank of England interest rates.
BoE Governor Andrew Bailey said on Tuesday that an interest rate cut in March was a possibility, although services price inflation in recent data had not fallen as much as hoped.
He said he would need further evidence to feel confident about cutting borrowing costs at the bank’s policy announcement on March 19, having voted with a 5-4 majority on the Monetary Policy Committee to hold interest rates this month.
(Reporting by William James; Editing by Toby Chopra)
