Britons Expect UK Inflation to Hit 3.5%

Britons' outlook on inflation is worsening with expectations that it will be well above target for the next decade, according to the latest survey by pollster YouGov and investment bank Citi.

The median for longer-term inflation expectations came in at 3.5 percent in the February survey of 2,020 people, up 0.1 percent on the month before. Britons also expect inflation to hold at around 2.8 percent across the coming year.

Members of the Bank of England's rate-setting Monetary Policy Committee (MPC) have suggested that sterling must be weakened in the near future, raising the prospect of further quantitative easing on top of the £375bn stimulus it has already injected into the economy, which would help to underpin the headline inflation number.

They have also made much of their monetary policy mandate being a flexible inflation target, which gives them room for stimulus even if it means the rate hovering above target for some time.

"The MPC may continue to have some slight disquiet that inflation expectations remain firmly entrenched above the 2 percent CPI inflation target," said Citi's UK economist Michael Saunders.

"However, the MPC also may take some comfort from the evidence that inflation expectations have been broadly stable for a while, and that the long period of above-target inflation has not translated into either higher wage growth or an uptrend in inflation expectations."

Inflation held at 2.7 percent in January for its fourth consecutive month.

Some economists suggest that much of what contributes to the headline inflation figure is out of the Bank of England's hands, such as recent volatility in global commodity prices.