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Fewer UK households expect rate rise in next six months - Markit

Published 21/10/2015, 09:37
© Reuters. Pedestrians walk past the Bank of England in the City of London

LONDON (Reuters) - Barely one in three British households expect the Bank of England to raise interest rates in the next six months, down from nearly half two months ago, a survey showed on Wednesday.

Financial data company Markit said that 34 percent of households polled in October as part of its monthly Household Finance Index expected rates to rise within six months, compared with 42 percent in September and 48 percent in August.

Roughly two-thirds of households still expect rates to rise within a year.

The global economic outlook has darkened since early August, but Bank of England Governor Mark Carney has continued to say the central bank plans to look more closely around the turn of the year at the case for raising interest rates.

Most economists polled by Reuters still expect the Bank of England to raise rates in the first three months of next year, But a number have pushed back their bets because of the less certain economic outlook, and financial markets which do not price in a rate rise until late 2016.

Markit said that households' view of their financial situation remained subdued, as in September.

"The financial strain was more pronounced than that seen throughout much of 2015 so far," Markit economist Philip Leake said.

British wages are rising in real terms after years of stagnation, but the government plans to cut wage subsidies paid to poorer Britons, and some economists are concerned about the knock-on effects of slower growth in emerging markets.

© Reuters. Pedestrians walk past the Bank of England in the City of London

Polling company Ipsos MORI interviewed 1,500 British adults aged 18-64 between Oct. 7 and Oct. 12 on behalf of Markit.

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