September 5, 2014 / 8:47 AM / 3 years ago

Nearly half of Britons see interest rate hike in next 12 months

2 Min Read

People pass the Bank of England in the City of London January 16, 2014.Luke MacGregor

LONDON (Reuters) - Nearly half of Britons now expect the Bank of England to raise interest rates from record low levels over the next 12 months, the highest proportion in more than three years, a poll showed on Friday.

The BoE's quarterly inflation attitudes survey showed 49 percent of people in August expected a rate hike over the next year, the largest share of respondents since May 2011, and up from 42 percent in May this year.

The survey also showed expectations for inflation over the coming year, and further ahead, crept up.

Britons saw the rate of inflation over the coming year at 2.8 percent, compared with 2.6 percent in May.

For the next two years, inflation expectations rose to 2.8 percent from 2.5 percent in May.

There was a steeper increase for inflation expectations five years from now, which rose to 3.4 percent from 2.9 percent in May.

The BoE kept interest rates on hold on Thursday as Britain's economy continued to thrive, but risks to the recovery both at home and abroad remained.

With economic growth set to reach more than 3 percent this year, economists polled by Reuters expect the BoE to raise interest rates in early 2015 - probably a few months before the U.S. Federal Reserve.

A fifth of the BoE's survey respondents said higher interest rates would be best for the economy, unchanged from May, while more than a third said rates should stay where they are.

Consumer price inflation slowed to 1.6 percent in July, from June's five-month high of 1.9 percent.

A separate question in the BoE survey showed that public confidence in the central bank was little changed in August, with the net balance of satisfaction slipping to +30 from +31.

The poll was carried out for the BoE by polling company GfK NOP, which surveyed 2,016 people between August 7 and August 15.

(Reporting by Andy Bruce and Hannah Murphy)

uk.economics@reuters.com +44 207 542 7748

0 : 0
  • narrow-browser-and-phone
  • medium-browser-and-portrait-tablet
  • landscape-tablet
  • medium-wide-browser
  • wide-browser-and-larger
  • medium-browser-and-landscape-tablet
  • medium-wide-browser-and-larger
  • above-phone
  • portrait-tablet-and-above
  • above-portrait-tablet
  • landscape-tablet-and-above
  • landscape-tablet-and-medium-wide-browser
  • portrait-tablet-and-below
  • landscape-tablet-and-below