In October, UK public inflation expectations for the 12 months ahead were at 4.2% but that fell to 3.9% in November and then to 3.5% in December last year. The declining trend is a positive takeaway at least but there is a risk of price pressures becoming more entrenched and stubborn in the months to come.
For now, the outlook is still that inflation will keep above 2% and that will keep the BOE on their toes. Luckily for the central bank, the economy is proving to be more resilient to start the year at least.