Britons' expectations for inflation over the next 12 months jumped to 3.3 percent in May, the highest level in nearly two years, a quarterly survey from the Bank of England showed on Friday.
That compared with 2.5 percent in February and was the highest since August 2008.
The sharp rise may be a worry to the BoE, which wants to ensure that expectations of above-target inflation do not get entrenched, leading to a long-term cycle of price rises and higher wage demands.
Still, analysts questioned the extent to which higher expectations would feed into wage rises given the weakness of the recovery and a looming public spending squeeze.
"It's worth keeping this number in context. When consumer price inflation last went above target, inflation expectations got to above four percent," said Alan Clarke, UK economist at BNP Paribas. "It's uncomfortable, but it's not flashing red yet."
Consumer price inflation hit a 17-month high of 3.7 percent last month, almost double the central bank's target. The survey showed the public was not far off the mark, estimating current inflation at 3.6 percent.
SHORT-LIVED PRESSURE?
The BoE maintains the recent spike in inflation is due to temporary factors and price pressures will abate later this year when the economy feels the effects of what economists expect to be the sharpest austerity drive in modern British history.
"We would not get too worried," said Vicky Redwood at Capital Economics. "Inflation expectations were much higher when inflation rose in 2008, but inflation still fell back sharply."
Britain's coalition administration has warned of "painful times ahead", with budget cuts of up to 20 percent expected in some departments as it tries to reduce a deficit running at nearly 11 percent of GDP.
Prime Minister David Cameron said dealing with the deficit will affect the "whole way of life" in Britain, where one in five workers is employed by the state. The government, which took power last month, will publish its first budget on June 22.
Britain's economy pulled out of recession at the end of 2009 but the recovery remains fragile and most economists do not expect the BoE to start tightening policy until early 2011.
The survey showed some 52 percent of Britons expect interest rates to rise over the next year compared to 6 percent who see a fall.
UK interest rates have stood at 0.5 percent since March 2009, when the BoE also launched an unprecedented scheme of asset purchases with newly-created money.
