UK, Turkish Inflation Expectations Rise Amid Economic Challenges

Recent surveys indicate a rise in inflation expectations in both the UK and Türkiye, reflecting economic pressures and market volatility. In the UK, a Citi/YouGov survey revealed longer-term inflation expectations increased to 4.2% in March, prompting caution from economists regarding the Bank of England's monetary policy. Conversely, in Türkiye, while market participants and the real sector reported declining inflation expectations at 24.6% and 41.1% respectively, household expectations slightly rose to 59.3%. Turkish Treasury Minister Mehmet Şimşek expressed optimism about the government's efforts to stabilize prices, despite acknowledging that recent financial market volatility could affect these expectations. A Reuters poll projected Turkey's year-end inflation at 29.75%, highlighting challenges stemming from political unrest, including the detention of Istanbul's mayor. Overall, both countries are grappling with inflationary pressures amidst shifting economic conditions.