UK Consumers expect a steep rise in inflation over the coming year following the sharp drop in the value of sterling after the UK voted vote to leave the European Union. Consumers also believe a hike in interest rates are inevitable a Bank of England survey showed.
The survey published 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. Over a five year time horizon 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. As well as the The Bank of England many private economists have also indicated inflation is set to climb sharply in 2017.
The Dollar strengthened Friday afternoon after figures revealed fewer Americans signed up for unemployment benefits last week, another sign the US job market remains healthy. Weekly claims for jobless aid slid by 10,000 to a seasonally adjusted 258,000. Overall, 2.01 million Americans are collecting unemployment checks, down 10 percent from a year ago.
The low numbers suggest that employers are hanging onto their workers and that most Americans enjoy job security. The unemployment rate is currently at a nine-year low 4.6 percent.