British household inflation expectations fell in July according to the Citi/YouGov survey released on July 28. One-year-ahead expectations dropped to 3.4% from 3.8% in June, while five-year-ahead expectations declined to 3.7% from 3.9%. This downward trend comes days before the Bank of England’s monetary policy decision expected on July 30 or 31, with markets pricing in a rate hold. Long-term expectations nonetheless remain above the central bank’s 2% inflation target. Separate surveys of UK firms also confirmed a easing in price and wage increase forecasts.
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