UK Poll Shows Interest Rate Hike Expected in 12 Months

Britons’ expectations for an interest rate hike over the next year continue to edge up even though their inflation forecasts have fallen, a poll commissioned by the Bank of England showed on Friday.

The BoE’s quarterly May inflation attitudes survey showed that 42 percent of Britons expect a rate rise over the next 12 months, the highest proportion since May 2011, versus 40 percent in February.

Inflation expectations over the next year fell to 2.6 percent, the lowest level since February 2010, compared with 2.8 previously.

Britons also cut their outlook for inflation for the next two and five years.

The inflation figures are likely to bolster the Bank of England’s message that it is in no rush to raise interest rates.

But the survey showed one in five respondents thought higher interest rates would be best for the economy, compared with 16 percent in February’s poll.

via CNBC

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