UK households see inflation pick-up, earlier BoE move: Markit
[LONDON] British households have raised their expectations for inflation to the highest level in eight months, making the prospect of a long-awaited interest rate hike by the Bank of England a little bit less distant in their eyes, a survey showed on Wednesday.
Financial data firm Markit also said rising income from employment pushed up its Household Finance Index to 45.3, one of the highest readings since the survey began more than seven years ago, although it was still below the no-change mark of 50.
"With inflation starting to pick up, some households brought forward their interest rate expectations in April," Markit economist Philip Leake said.
"For the first time since January, more than half of respondents expect a rise in the base rate over the coming year. Simultaneously, the proportion of households predicting a rate cut was down from the survey-record high seen in March."
British inflation fell below zero last year but has shown signs of rising gradually. Most economists expect the BoE to raise interest rates only in late 2016 or in 2017, and it might cut them if the country votes to leave the European Union in June, something which could deliver a shock to the economy.
REUTERS
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