British households are bracing for higher price growth, according to a recent survey conducted by U.S. bank Citi and pollster YouGov. The poll, released on Tuesday, found that the public’s expectation for inflation over the next 12 months rose to 3.9% in August, up from 3.4% in July.

Long‑term outlook also climbs

When respondents were asked about price growth beyond the coming year, the average expectation increased to 4.1%, the highest level since April. In July, the longer‑term forecast stood at 3.7%.

Citi’s assessment

Citi described the uptick as a “hawkish development” in the series of inflation expectations, noting that the shift suggests households are beginning to anticipate more persistent price pressures. The firm cautioned, however, that a single survey should not be over‑interpreted and that the upcoming release of official inflation data next month will provide a clearer picture.

Bank of England’s watchful eye

The Bank of England is closely monitoring the situation, particularly the impact of rising energy costs linked to the ongoing war in Iran. Officials are concerned that the energy price spike could translate into broader, longer‑lasting inflationary pressures if not contained.

What this means for consumers

Higher inflation expectations can influence household spending decisions, wage negotiations, and savings behavior. When people anticipate rising prices, they may accelerate purchases, seek higher wages, or adjust their budgeting to protect against eroding purchasing power.

Looking ahead

The next official inflation report, due in September, will be a key indicator of whether the current expectations are justified. Analysts will compare the survey’s forecast with actual price movements to gauge the effectiveness of monetary policy and the resilience of the UK economy amid external shocks.

For now, the Citi‑YouGov survey underscores the uncertainty facing British consumers as global events continue to ripple through energy markets and domestic price dynamics.

Original reporting: Appleton, WI News Feed (HLL/CB) — read the source article.