British Consumers Expect Inflation to Slow

British consumers are feeling more optimistic about inflation.

Consumers said in April that they expect inflation to be 5.2% a year from now, a figure that was lower than the 5.4% they said they expected in March, Reuters reported Monday (May 1), citing a survey released by Citi.

The United Kingdom public is more optimistic in the longer term as well, saying in April they expected inflation to be 3.6% five to 10 years from now, rather than the 3.7% predicted in March, according to the report.

Citi did not immediately reply to PYMNTS’ request for comment.

This news comes at a time when inflation in the U.K. is running at 10% and when the Bank of England is expected to announce another interest rate hike — its 12th in a row — when it meets May 11, according to the report.

The country’s current high inflation is reflected in consumers’ expectations for the future, “which held well above pre-pandemic ranges,” Citi economist Benjamin Nabarro said in the report.

As PYMNTS reported in August 2022, when the U.K.’s Consumer Price Index (CPI) jumped by 10.1% in the year to July, it signaled a double-digit inflation rate for the first time in 40 years — since 1982.

Amid the soaring inflation and rising food and fuel prices, terms like “financial literacy” and “spend management” have emerged as some of the biggest buzzwords.

These have become urgent issues, both for consumers and on the national agenda.

In the grocery sector, for example, Brits are trying to cut back on spending and expenses — and U.K. grocers are under pressure to step up their discounting efforts.

One of the U.K.’s largest supermarket chains, Asda, announced on April 17 that shoppers will be able to earn 5 pounds (about $6.25) in their Asda Rewards cash pot when they buy the retailer’s frozen roast dinner solution that is priced at about 12 pounds (about $15).

PYMNTS research has found that rewards are the single most important shopping feature British consumers want merchants to provide.

About 40% of all U.K. shoppers want merchants to provide digital rewards programs, according to the “2023 Global Digital Shopping Index: U.K. Edition.”