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Do inflation expectations currently pose a risk to inflation?

Author

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  • Domit, Sílvia

    (Bank of England)

  • Jackson, Chris

    (Bank of England)

  • Roberts-Sklar , Matt

    (Bank of England)

Abstract

People’s expectations about future inflation play an important role in determining the current rate of inflation and so in the Monetary Policy Committee (MPC) meeting its remit. Measures of inflation expectations at both short and longer horizons have generally fallen over the past year. Despite that, most indicators are broadly consistent with expectations remaining anchored to the MPC’s inflation target. Lower inflation expectations could lead to weak inflation becoming more persistent, although there are few signs that weaker inflation expectations have weighed significantly on inflation over the recent past.

Suggested Citation

  • Domit, Sílvia & Jackson, Chris & Roberts-Sklar , Matt, 2015. "Do inflation expectations currently pose a risk to inflation?," Bank of England Quarterly Bulletin, Bank of England, vol. 55(55), pages 165-180.
    • Handle: RePEc:boe:qbullt:0174
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    References listed on IDEAS

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    Cited by:

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    2. International Monetary Fund, 2016. "Brazil: Selected Issues," IMF Staff Country Reports 2016/349, International Monetary Fund.
    3. Kapetanios, George & Maule, Becky & Young, Garry, 2016. "A new summary measure of inflation expectations," Economics Letters, Elsevier, vol. 149(C), pages 83-85.
    4. Baumann, Ursel & Darracq Pariès, Matthieu & Westermann, Thomas & Riggi, Marianna & Bobeica, Elena & Meyler, Aidan & Böninghausen, Benjamin & Fritzer, Friedrich & Trezzi, Riccardo & Jonckheere, Jana & , 2021. "Inflation expectations and their role in Eurosystem forecasting," Occasional Paper Series 264, European Central Bank.
    5. Ciccarelli, Matteo & García, Juan Angel, 2015. "International spillovers in inflation expectations," Working Paper Series 1857, European Central Bank.
    6. Juan Carlos Berganza & Pedro del Río & Fructuoso Borrallo, 2016. "Determinants and implications of low global inflation rates," Occasional Papers 1608, Banco de España.
    7. Kaminska, Iryna & Liu, Zhuoshi & Relleen, Jon & Vangelista, Elisabetta, 2018. "What do the prices of UK inflation-linked securities say on inflation expectations, risk premia and liquidity risks?," Journal of Banking & Finance, Elsevier, vol. 88(C), pages 76-96.
    8. Luigi Bonatti, & Andrea Fracasso & Roberto Tamborini, 2021. "What to expect from inflation expectations: theory, empirics and policy issues," DEM Working Papers 2022/1, Department of Economics and Management.

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