The Bank of England’s latest quarterly inflation attitudes survey comes down firmly on the inflationary side of things — at least for the UK.
For the second quarter of 2010, the BoE survey has year-ahead median inflation expectations rising by 0.8 percentage points to 3.3 per cent.
For context, the last time it was 3.3 per cent or higher was in August 2008 — at the height of the commodity bubble — when it was 4.4 per cent.
Meanwhile, while the UK’s Producer Price Index (also out today) showed input prices falling -0.6 per cent in May; a decline, but markets were expecting a fall of -0.8 per cent. Plus, the decline seemed to be almost entirely down to a drop in crude oil prices. As Barclays Capital put it:
Every other component of input prices rose on the month, highlighting that producers continue to face price pressures; this is something that has been indicated through the PMI surveys over the past few months, and today’s fall does little to change the wider picture.
Things might well be getting a tad uncomfortable over at Threadneedle Street.
Commods plays: Clever or daft? – FT Alphaville
Towards a new UK inflation target – FT Alphaville
Dear George, about that inflation… – FT Alphaville
Sticky inflation, redux – FT Alphaville