Higher UK interest rates, inflation not a surprise to consumers - survey |
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Thu, 18 Jan 2007 01:18
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LONDON (AFX) - The vast majority of UK consumers in December were already expecting both inflation and interest rates to rise in 2007, a survey showed.The Consumer Barometer, published by Lloyds TSB Corporate Markets, showed 78 pct of those polled were expecting interest rates to rise in the next 12 months, while 76 pct were ready for consumer prices to rise in the same period.This suggests the surprise rate hike by Bank of England last week and the record-high inflation figures released on Tuesday may disrupt consumer spending less than analysts fear.'Few commentators expected the MPC to act so soon but consumers were certainly anticipating at least one rate rise during 2007, suggesting that the move might have a limited impact on the housing market and consumer spending,' said Trevor Williams, chief economist at Lloyds TSB Corporate Markets.However, the survey shows more than twice as many Britons think employment prospects have worsened over the past year than those who think they have improved.'This means that consumer spending might turn quite quickly if interest rates continue to rise,' Williams said.carlo.piovano@thomson.comcp/jkm/amCOPYRIGHTCopyright AFX News Limited 2006. All rights reserved.The copying, republication or redistribution of AFX News Content, including by framing or similar means, is expressly prohibited without the prior written consent of AFX News.AFX News and AFX Financial News Logo are registered trademarks of AFX News Limited
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Bank of England in a tizz as inflation rates rocket 