The Citi/YouGov survey reveals that UK household inflation expectations have sharply declined, falling from 4.7% in May to 3.8% in June for the one-year ahead measure, a nearly one percentage point drop in a single month. Long-term expectations, covering five years or more, also decreased from 4.0% in May to 3.9% in June. In July, this downward trend continued with one-year expectations at 3.4% and longer-term expectations at 3.7%, levels close to those recorded in January before geopolitical tensions in the Middle East escalated. This monthly survey, conducted since at least 2005, is considered by the Bank of England as a meaningful signal for calibrating monetary policy. For the BoE, this decline in expectations reduces pressure to maintain a hawkish stance, though August and September readings will be pivotal for the remainder of 2026.
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