Friday, June 11, 2010
Inflation expectations up, industrial production down
Posted by David Smith at 12:00 PM
Category: Thoughts and responses

The Bank of England has said it will be concerned about a rise in inflation expectations and a rise in inflation expectations is what we have. Respondents to the Bank's inflation attitudes survey, carried out by GfK-NOP, think inflation will be 3.3% over the next 12 months, compared with 2.5% the last time the survey was done, in February.

Though this is a significant rise it is lower than current inflation (3.7%) and below levels it reached two years ago. In August 2008, before inflation's sharp fall, expectations on this measure reached 4.4%. The Bank's monetary policy committee will have had this information in agreeing to stick with Bank rate at 0.5% on Thursday. More here.

Also, both manufacturing and overall industrial production slipped in April following strong March rise, but are still showing healthy annual gains and should contribute to good growth in the second quarter. More here. Output price or 'factory gate' inflation slipped to 5.7% in May from 5.9% in April. The core measure edged down from 4.5% to 4.4%. That release is here.