UK inflation expectations leap in fourth quarter
Brexit shock appears to have driven increase in inflation expectations
A post-Brexit increase in inflation expectations gathered pace in the fourth quarter of 2016, according to the Bank of England's latest inflation attitudes survey.
Expected inflation one year ahead rose 60 basis points to 2.8%, while expectations two years ahead rose 30bp to 2.5%. The BoE itself forecasts inflation will peak at around 2.9% in early 2018 before sinking back towards the target of 2%.
The UK's vote to leave the European Union in June sent the pound tumbling, which has launched
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