Investing.com – U.K. citizens lifted expectations of inflation in the next 12 months to the 2% target and responded that they had higher expectations of a rate hike in that time period, according to the May survey by the Bank of England (BoE) released on Friday.
The quarterly inflation attitudes survey showed that the public now expects inflation to be 2.0% over the next 12 months, compared to the 1.8% response given in February.
In that light, they gave the probability of 41% for a rate hike in the next year, compared to the prior odds of 38%.
Asked about expectations of inflation in the longer term, say in five years’ time, respondents gave a median answer of 3.4%, compared to 2.9% in February.
By a margin of 47% to 10%, survey respondents believed that the economy would end up weaker rather than stronger if prices started to rise faster, compared with 46% to 12% in February.
The survey results were based on the responses from 2,143 people between May 6 and 10.
Most economists expect the first rate hike by the BoE to come in early 2017.