Nearly Half of Britons Expect Rate Hike in next 12 Months – BoE Survey

People in Britain are increasingly heeding the message from Bank of England Governor Mark Carney that the time is coming for a first increase in interest rates since before the financial crisis.

A survey by the central bank published on Friday that showed that proportion of Britons expecting rates to increase over the next year, minus those who expected a rate cut, rose to 46 percent, up from 33 percent in May.

That was the highest level of expectation about a rate hike since May 2011, the BoE said.

Despite near-zero inflation, Carney has said a decision on whether to raise rates will become clearer around the turn of the year.

Economists polled by Reuters predict the BoE will keep rates at a record low until the first quarter of next year as it seeks to ensure that a recovery in earnings is entrenched.

The BoE survey showed the public expected inflation in 12 months time would stand at 2.0 percent compared with a forecast of 2.2 percent in May’s survey.

Inflation expectations for two and five years ahead were unchanged at 2.3 and 2.8 percent respectively.

Reuters

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