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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Alfonso Esparza

Alfonso Esparza

Senior Currency Analyst at Market Pulse
Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, Alfonso Esparza established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency trader focused on North America and emerging markets. He has been published by The MarketWatch, Reuters, the Wall Street Journal and The Globe and Mail, and he also appears regularly as a guest commentator on networks including Bloomberg and BNN. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.
Alfonso Esparza