10 July 2006
Consumers in the UK are becoming increasingly convinced that interest rates will rise, despite also feeling that inflation pressure is subsiding, according to a consumer survey.
The June consumer barometer by Lloyds TSB found that 65% of consumers thought that rates would be higher in a year's time, up from 59% in May.
"Consumers are perhaps feeling more secure in their jobs because employment continues to grow, and this is very encouraging news, particularly as the claimant count has risen in 14 out of the last 15 months," said Trevor Williams, chief economist, Lloyds TSB Corporate Markets.
"Hopefully, this increased confidence will help provide a boost consumer spending in the quarters ahead."
He added: "Financial markets expect a rise of up to 0.50% this year and next month's BoE (Bank of England) inflation report could easily provide the justification for a 0.25% hike."
Around 2,000 people were questioned as part of the survey.
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