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12 June 2006
British consumers are preparing themselves for a rise in interest rates in coming months.
Lloyds TSB's Consumer Barometer showed that the number of consumers expecting a rise in interest rates in the next year was at its highest level for 13 months.
Around 66 per cent of consumers were expecting rates to rise in the coming year in May, up from 59 per cent in April.
The balance figure, which is the number of those expecting rates to rise minus those expecting rates to fall was also at its highest since April 2005 at 59 per cent.
"Although the MPC (Monetary Policy Committee) kept rates on hold last week, a hawkish quarterly Bank of England report in May and the first vote by an MPC member for a rate rise since May 2005, hinted at the first nudge towards a 25 basis point rate rise in the final quarter of the year," said chief economist at Lloyds TSB Financial Markets, Trevor Williams.
"This latest survey indicates that households across the UK are bracing themselves for the inevitability that the next rate move will be a rise."
However, fewer consumers were expecting to see a rise in prices, with the percentage expecting prices to rise falling below 80 per cent for the first time in four months.
The MPC last week voted to hold interest rates steady at 4.5 per cent for the tenth month in a row, fulfilling most analysts' predictions.
If a rise in interest rates will affect you and your financial commitments, order your credit report now to find out where you stand.
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