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.


Craig Erlam
Based in London, England, Craig Erlam joined OANDA in 2015 as a Market Analyst. With more than five years' experience as a financial market analyst and trader, he focuses on both fundamental and technical analysis while conducting macroeconomic commentary. He has been published by The Financial Times, Reuters, the BBC and The Telegraph, and he also appears regularly as a guest commentator on Bloomberg TV, CNBC, FOX Business and BNN. Craig holds a full membership to the Society of Technical Analysts and he is recognized as a Certified Financial Technician by the International Federation of Technical Analysts.