UK pub­lic rate hike ex­pec­ta­tions up

The Pak Banker - - FRONT PAGE -

Slightly more Bri­tish peo­ple think the Bank of Eng­land will raise in­ter­est rates over the next year than did three months ago, de­spite a weaker out­look for in­fla­tion, a cen­tral bank sur­vey showed on Fri­day.

The BoE said 38 per­cent of peo­ple sur­veyed in Fe­bru­ary ex­pected it to raise rates in the next 12 months, up from 35 per­cent in Novem­ber but down from a re­cent peak of 50 per­cent in Au­gust. This con­trasts with the trend in econ­o­mists' views, most of whom have pushed back their bets on when the BoE will start to raise in­ter­est rates from their record low 0.5 per­cent as the global eco­nomic out­look has dark­ened. A Reuters poll ear­lier this week showed that most econ­o­mists do not ex­pect the BoE to raise rates un­til the first quar­ter of 2017, com­pared with the fourth quar­ter of 2016 in a poll just a month ear­lier.

The Bank of Eng­land's poll of more than 4,000 Bri­tons aged 16 and over showed that they ex­pected in­fla­tion to be 1.8 per­cent over the next 12 months, down from 2.0 per­cent ex­pected in Novem­ber, and to be 2.1 per­cent a year af­ter that. An­nual con­sumer price in­fla­tion is cur­rently 0.3 per­cent. A sim­i­lar sur­vey by polling com­pany YouGov for Citi showed last month that Bri­tons' in­fla­tion ex­pec­ta­tions for the year to come rose to a five-month high of 1.5 per­cent in Fe­bru­ary.

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