Britons see higher inflation and interest rates in 2017-BoE survey
Fri, 9th Dec 2016 09:32
LONDON, Dec 9 (Reuters) - Britons expect a sharp rise in inflation over the coming year following the plummet in the value of sterling after Britain's vote to leave the European Union, and more now believe a hike in interest rates is on the way, a Bank of England survey showed.
The survey published on Friday showed average public inflation expectations over the next 12 months rose to 2.8 percent in November from 2.2 percent in the previous survey in August.
Taking a five-year view, Britons expected inflation of 3.1 percent, slightly higher than the 3.0 percent forecast of three months earlier.
Forty-one percent of respondents in the survey expected interest rates to rise over the next 12 months, compared with 21 percent in August.
The Bank of England and many private economists have said inflation is set to climb sharply in 2017.
After the EU referendum in June, sterling fell as much as 20 percent against the U.S. dollar but has recovered slightly to be down around 16 percent.
So far, the British economy has largely weathered the initial Brexit shock better than many expected.
But a rise in inflation next year is likely to strain the spending power of households who have driven the recovery in the economy since the financial crisis of 2007-09.
Britain's inflation rate in the 12 months to October stood at 0.9 percent and the Bank has previously said it expects it to peak at 2.8 percent in early 2018. Bank of England Governor Mark Carney has said the BoE is prepared to let inflation run above its 2 percent target in 2017 but there were limits to tolerating the overshoot.
The Bank of England/TNS survey polled 2,095 people in 368 randomly selected output areas across Britain from Nov. 4 to 8.
The BoE said on Nov. 3 that it was no longer expecting to cut interest rates again during 2016 and it moved to a neutral stance about its next monetary policy move. (Reporting by Adela Suliman; Editing by William Schomberg)
Hi , getting by , thanks .Everything ok with you and Cap'n Pugwash , .....bit to go yet till 58p , ... next year Rodders , maybe , not sure anybody knows how brexit and Trump are going to pan out . We live in strange never mind interesting times , lol. Enjoy yourself over the holly season . Take care ATB x
25 NOVEMBER 2016 • 2:37PM Royal Bank of Scotland is set to receive €1.5bn (£1.3bn) in capital from Ulster Bank after its Irish operation received the green light from regulators to pay its first dividend since the financial crisis.
Ulster Bank, which has businesses in both Northern Ireland and the Republic, plans to pay out €1.5bn to RBS subsidiary National Westminster Bank on November 30 after it was given the go-ahead for a dividend by both the Central Bank of Ireland and the European Central Bank.
The payment, which has long been on the cards, will be made by Ulster’s business in the Republic. While the dividend does not change the total capital that RBS holds, it does allow the Edinburgh-based lender to release trapped capital that it can deploy elsewhere in the group.
The payment is also a landmark for Ulster Bank, which state-backed RBS had to bail out to the tune of £15bn following the crash. Ireland’s banking system was plunged into turmoil after its property market collapsed during the crisis.
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