BoE DMP (Aug): 1-year CPI expectation 3.1% (prev. 3.4%), 3-year CPI expectation 2.8% (prev. 2.8%)

A fall in year-ahead CPI expectations alongside an unchanged three-year reading and steady wage expectations fits the pattern of near-term disinflation being absorbed without the medium-term anchor moving, which is the configuration the committee's hawks have cited to argue against faster easing. The distinction that matters for rates is between expectations, which tend to follow headline inflation lower mechanically, and realised wage settlements, which are the variable the MPC has said it needs to see soften before cutting with confidence. On previous occasions when the wage lines in this survey have surprised relative to official pay data, the short end of the gilt curve and SONIA pricing have responded more than they do to the inflation expectation lines alone. Worth watching is whether the next labour market prints corroborate the steady wage expectations reading, and whether MPC commentary treats the survey as confirmation of persistence or as grounds for patience turning into action. As a monthly survey with modest sample turnover, single prints have tended to matter less than the run-rate across two or three releases.