UK inflation expectations rise to 16-yr high-survey

Britons' inflation expectations are running at their highest level since 1992, according to a survey on Tuesday which flagged the risk that price pressures could generate higher wage demands.
The Barclays Survey of Inflation Expectations for August showed inflation was seen at 4.8% in two years' time, the highest since comparable records began in 1992 and up from expectations of 4.7% reported in the June survey.
Inflation expectations for the next 12 months rose to 4.7% from 4.4% in June, its highest since the first quarter of 1992.
"We forecast a further near-term rise in essential price inflation and qualitatively we see this as a risk that inflation expectations will remain at elevated levels through Q4," said George Johns, economist at Barclays Capital.
The survey of 1,900 people in the UK also showed no let-up for inflation was expected in the medium-term with five-year inflation seen at 4.8%. No comparison with June was given.
Bank of England monetary policy committee member Tim Besley said on Tuesday the central bank faced a difficult task in fine-tuning monetary policy to try to help the UK economy while keeping inflation in check.
The BoE's August Inflation Report showed inflation hitting 5% this year, but falling dramatically thereafter as food and oil prices fall and economic growth slows.