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International evidence on inflation expectations during Sustained Off-Target Inflation episodes

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The high level of UK inflation in recent years raises the possibility that inflation expectations may drift upwards, making the period of above-target inflation last for longer. This article presents some evidence on inflation expectations during Sustained Off-Target Inflation (SOTI) episodes in other inflation-targeting countries and outlines some of the key trends. The evidence suggests that short and medium-term inflation expectations have tended to drift in the direction of the deviation of inflation from target. But generally the movements in inflation expectations were more gradual than movements in inflation itself and expectations returned to their previous level once inflation returned to target.

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  • Corder, Matthew & Eckloff, Daniel, 2011. "International evidence on inflation expectations during Sustained Off-Target Inflation episodes," Bank of England Quarterly Bulletin, Bank of England, vol. 51(2), pages 111-115.
    • Handle: RePEc:boe:qbullt:0048
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    1. Macallan, Clare & Taylor, Tim & O'Grady, Tom, 2011. "Assessing the risk to inflation from inflation expectations," Bank of England Quarterly Bulletin, Bank of England, vol. 51(2), pages 100-110.
    2. Gill Hammond, 2012. "State of the art of inflation targeting," Handbooks, Centre for Central Banking Studies, Bank of England, edition 4, number 29, April.
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    1. IBADULA Birol & VLAD Cristina & IONITA Claudiu, 2017. "Direct Taxation Trends In European Union And Romania, The Influence Of Direct Taxation On Budget Deficit," Revista Economica, Lucian Blaga University of Sibiu, Faculty of Economic Sciences, vol. 69(4), pages 118-128, November.
    2. Dániel Felcser, 2013. "How should the central bank react to the VAT increase?," MNB Bulletin (discontinued), Magyar Nemzeti Bank (Central Bank of Hungary), vol. 8(1), pages 35-41, January.
    3. Pang, Ke & Shiamptanis, Christos, 2024. "Is the Bank of Canada concerned about inflation or the state of the economy?," Journal of International Money and Finance, Elsevier, vol. 140(C).
    4. Murillo Garza José Antonio & Sánchez-Romeu Paula, 2012. "Testing the Predictive Power of Mexican Consumers' Inflation Expectations," Working Papers 2012-13, Banco de México.
    5. Macallan, Clare & Taylor, Tim & O'Grady, Tom, 2011. "Assessing the risk to inflation from inflation expectations," Bank of England Quarterly Bulletin, Bank of England, vol. 51(2), pages 100-110.
    6. Neuenkirch, Matthias & Tillmann, Peter, 2014. "Inflation targeting, credibility, and non-linear Taylor rules," Journal of International Money and Finance, Elsevier, vol. 41(C), pages 30-45.

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