What the survey found

The British public's expectations for future inflation fell in October, for the first time in two months, according to a Citi/YouGov survey published on Thursday 29 October 2026. Expectations for inflation in five or more years' time, a measure closely watched by the Bank of England, fell to 4% in October from 4.3% in September.

Year-ahead inflation expectations also eased, falling to 4.2% from 4.5% in September. Reuters noted that year-ahead expectations tend to be influenced by short-term inflation and energy prices, which makes the October fall notable given the backdrop.

Why the fall surprised analysts

Citi said there was little obvious explanation for the drop, given that oil and gas prices continued to rise in October and tensions remained high in the Iran war. The bank's analysts nevertheless cautioned against reading too much into a single month's survey.

The fall was unlikely on its own to stop the Bank of England raising rates the following week, Citi said. Investors expected a quarter-point Bank rate rise the following Thursday, described by Citi as all but guaranteed, with a further move possible in early 2027.

What it means for households

Longer-term inflation expectations matter because they can feed into wage and price decisions. A fall in the five-year measure is therefore welcome news for policymakers, even if it does not change the immediate outlook for borrowing costs.

For mortgage holders and savers, the practical signal is unchanged for now: markets are still priced for a rise next week. The survey will be one input among many when the Bank sets out its decision and its latest forecasts.

Sources: Reuters