Fewer UK households expect rate hike in next six months, says Markit

UK households have scaled back their expectations for an interest-rate hike by the Bank of England, according to Markit’s Household Finance Index for November.

It said 23% of households now expect the BoE to raise rates in the next six months - the lowest proportion since October 2013 and down from 34% last month.

The change follows comments from the BoE a couple of weeks ago that near-zero inflation would pick up more slowly than previously expected.

"Low inflation perceptions contributed to households' dovish views regarding Bank of England monetary policy," said Markit economist Philip Leake.

The survey also found that UK households’ financial expectations had improved.

"Markit’s HFI pointed to a further squeeze on household finances during November. That said, the degree of pressure eased to the weakest in four months and was subdued compared with the post-recession trend,” said Leake.

“Meanwhile, renewed optimism was signalled towards financial prospects for the year-ahead. A positive economic dataflow supported the improved outlook – latest figures highlighted lower unemployment and falling consumer prices.”