Uk Inflation Expectations Hit 2-Year High

[interestrateripoff]

http://www.telegraph.co.uk/finance/economics/interestrates/7820803/UK-inflation-expectations-hit-2-year-high.html

The forecast, from the Bank's quarterly survey of public expectations, was the highest since August 2008.

The jump, compared with 2.5pc in February, will concern the Bank as it seeks to ensure that above-target inflation expectations do not lead to a long-term cycle of rising prices and increased pay demands.

Consumer price inflation hit a 17-month high of 3.7pc last month, almost double the central bank's 2pc target.

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 4pc," Alan Clarke, UK economist at BNP Paribas, told Reuters. "It's uncomfortable, but it's not flashing red yet."

Separately, UK manufacturing output fell unexpectedly in April, raising fears that the fragile recovery may be running out of steam. Industrial production fell 0.4pc compared with a forecast rise of 0.5pc.

It's just like the hokey cokey.

[NotMyHouse]

But now I'm confused. I thought 10 out of 25 economists said it was definitely deflation.

[betterToDo]

prices upleads to,people substitute/use less/don't buy at all.

Not, it would appear, in the case of houses.

[Realistbear]

There are probably a lot of home owners who expect their houses to inflate this year and next and next......

When enough VIs tell them inflation will characterise their "investments" they will be expecting quite a lot.

IMO their expectations will be dashed against the rocks of a viciously deflating market for houses. And as houses are the main driver of our economy much will deflate along with the bricks and mortah.