Britons see inflation rising, rate hike expectations muted - BoE

Business & Markets 2013
Written by Reuters
Friday, 06 December 2013 18:58
A + A - Reset
(06/12/13 18:18:38)
LONDON (Dec 6): British people expect inflation to pick up, but are still largely
heeding the message from Bank of England Governor Mark Carney, that
interest rates will not go up any time soon, even as the economy recovers, a
survey showed on Friday.
A quarterly poll commissioned by the BoE, found that the median expectation
for inflation over the next 12 months rose to 3.6 percent, from 3.2 percent in
August.
Fewer people expected the BoE's record-low interest rates to remain
unchanged over the coming year, than they did in August, at 43 percent,
compared with 49 percent. However, the latest reading was still the secondhighest
since the survey began in 1999, the BoE said.
Thirty-four percent expected rates to rise — up from 29 percent three months
ago, but lower than the average of 52 percent in 2010 — when economic
growth was last as strong.
Carney took over the BoE in July and a month later, the Bank said it would not
consider raising interest rates until unemployment falls to 7 percent — an
attempt to give households and businesses the confidence to spend and spur
the recovery.
Carney has said that big increases in power tariffs in recent weeks, probably
pushed up inflation expectations.