UK public rate hike expectations up
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.