How are Households’ Inflation Expectations Formed?

5 Pages Posted: 18 Jul 2016

Date Written: July 12, 2016

Abstract

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.

Suggested Citation

Rowe, Jeremy, How are Households’ Inflation Expectations Formed? (July 12, 2016). Bank of England Quarterly Bulletin 2016 Q2. Available at SSRN: https://ssrn.com/abstract=2811001

Jeremy Rowe (Contact Author)

Bank of England ( email )

Threadneedle Street
London, EC2R 8AH
United Kingdom

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