The UK public's inflation expectations cooled off for the second straight month in January, a monthly survey conducted by Citi and YouGov showed on Tuesday.

Key takeaways

British public expectations for five to 10 years ahead fell to 3.5% in January from 3.6% in December, just short of the 3.0% to 3.4% range seen ahead of the COVID-19 pandemic.

For 12 months ahead, the UK public inflation expectations declined to 5.4% in January from 5.7% in the previous survey.

The declining trend in the UK public inflation expectations should further comfort to the Bank of England that high prices will not become permanently embedded in expectations, Reuters reports, citing the survey.

Market reaction

GBP/USD is holding the lower ground on the above survey findings, which fan dovish BoE expectations. The pair is trading at 1.2318, down 0.26% on the day, as of writing.