Inflation expectations for the year ahead remained stable in December, ending the year below the previous year's level for the first time since 2008, a survey by Citi/YouGov showed on Friday.
The median for inflation expectations in the year ahead was stable at 3.1 percent in December, well below the high of 3.9 percent hit in June and 3.5 percent recorded last December, Citi said.
The results are likely to reassure the Bank of Enlgand's policymakers that this year's inflation surge above 5 percent has not destabilised inflation expectations, Citi analyst Micheal Saunders said.
Provided inflation expectations do not surge -- and we doubt they will surge -- substantial further increases in QE are likely in coming quarters, in our view, Saunders said.
The BoE has increased its target for asset purchases by 75 billion pounds to 275 billion in October and many analysts expect another boost in February.
The median for inflation expectations for the next five to 10 years edged down to 3.4 percent in December from 3.5 percent in November, Citi said.
(Reporting by Sven Egenter)