UK inflation expectations for the year ahead shot to a new high of 3.8 percent in April, taking the reading way above the Bank of England's target rate for inflation of 2.0 percent, according to a survey by YouGov/Citigroup. The reading is the highest since the survey began in late 2005 and represents a sharp rise from 3.6 percent in March and 3.1 percent in February. The latest official data for March showed annual CPI inflation at 2.5 percent. If inflation were to rise above 3.0 percent, the Bank of England governor Mervyn King would have to write a letter of explanation to the Chancellor of the Exchequer Alistair Darling. Such a sharp increase in inflation expectations will alarm BoE rate-setters and increase the dilemma they face as they try to steer the economy at a time when growth is slowing but prices are rising. The BoE has cut interest rates three times since December, but this survey will diminish expectations that rate-setters will follow the cut earlier this month with a further reduction in May. "The further rise in inflation expectations in April is a blow to hopes that the Bank of England will trim interest rates by a further 25 basis points as soon as May," said Howard Archer at Global Insight.