Inflation expectations among the British public rose sharply in March, according to a closely watched survey, underscoring mounting concern over future price pressures and complicating the outlook for monetary policy.

The monthly survey conducted by Citi and YouGov found that households’ expectations for inflation over the next twelve months increased significantly compared with February, reversing a recent decline and reaching their highest level in several months.

The shift reflects growing sensitivity among consumers to rising costs, particularly in energy and essential goods.

The rebound follows a period in which expectations had eased earlier in the year, with February figures showing a notable drop.

The March surge therefore marks a decisive change in sentiment, suggesting that households are once again bracing for higher inflation.

Economists note that such expectations can play a critical role in shaping actual inflation outcomes, as they influence wage demands and spending behavior.

A sustained increase in expectations risks embedding higher inflation into the economy, making it more difficult for policymakers to bring price growth back to target.

The latest data comes at a time of renewed volatility in global energy markets, driven by geopolitical tensions that have pushed up oil and gas prices.

These developments are feeding directly into consumer perceptions, as households respond to visible increases in fuel and utility costs.

For the Bank of England, the rise in expectations presents a renewed challenge.

While headline inflation had shown signs of easing earlier in the year, policymakers have repeatedly stressed the importance of anchoring expectations to prevent a resurgence of price pressures.

Financial markets are now reassessing the path of interest rates, with the possibility that policymakers may need to maintain tighter conditions for longer than previously anticipated.

Analysts warn that the persistence of elevated expectations could delay any move toward policy easing, even as broader economic growth remains fragile.

The survey highlights the delicate balance facing the UK economy, as policymakers seek to support growth while guarding against a renewed inflation cycle driven by external shocks and shifting public sentiment.