Half of UK households expect BoE rate hike in next six months

Around half of British households expect the Bank of England to hike interest rates in the next six months, up sharply since July even though they have become more downbeat about their finances, a survey showed on Wednesday.

Markit’s monthly Household Finance Index showed 48 per cent of households predict the BoE will raise interest rates over the next six months, the highest figure since July 2014 and up from 34 per cent last month.

Economists polled by Reuters expect a first interest hike early next year as Britain’s economy shows little sign of slowing much.

However, households were the gloomiest about their finances so far in 2015, across a majority of job sectors. They were slightly less downbeat about the prospects over the next 12 months than they were in July.

Data company Markit said the survey suggested the boost in consumer morale from falling inflation has started to ease off.

"Improving economic fundamentals and gradually rising income from employment should continue to support household finances through the remainder of this year," said Tim Moore, senior economist at Markit.

“But the ongoing strains reported in August highlight an underlying fragility around the edges of the recovery.”

Reuters