Turkish inflation expectations edged up in April for businesses and market participants, and remained steady at 59.3 per cent in 12 months time for households, the central bank said on Friday, reflecting fallout from market turmoil last month.

The real sector’s inflation expectations for the same period increased 0.6 points to 41.7 per cent in April, the bank’s survey data showed.

Market participants’ expectations rose by one percentage point to 25.6 per cent, leaving a wide gap with households.

The central bank reversed its policy easing cycle last week citing in part a slight rise in inflation expectations after a selloff in the lira and other Turkish assets last month caused by the arrest of Istanbul’s mayor.

The bank hiked its policy rate to 46 per cent from 42.5 per cent, saying: “Inflation expectations and pricing behaviour continue to pose risks to the disinflation process”.

Annual inflation had slowed to 38.1 per cent in March, and the central bank expects it to hit 24 per cent by year end.