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Home > News and Publications > How are households’ inflation expectations formed? - Quarterly Bulletin 2016 Q2
 

How are households’ inflation expectations formed? - Quarterly Bulletin 2016 Q2

12 July 2016

​Full article

By Jeremy Rowe

How are households’ inflation expectations formed? - Quarterly Bulletin 2016 Q2

​Expectations about future inflation are an important factor determining current inflation and therefore the ability of the Monetary Policy Committee (MPC) to meet its 2% inflation target.

Households’ inflation expectations are informed by recent perceptions of inflation, particularly at shorter horizons. Wider macroeconomic factors, including the inflation target, also inform households’ inflation expectations, and more so at longer horizons.

 

 

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