Bank of England survey shows most Britons believe rates will stay on hold for another year

Financial markets are not pricing in a move until late next year

Governor of the Bank of England Mark Carney (GETTY IMAGES)

The Bank of England’s message on interest rates is resonating with the public with nearly two thirds believing borrowing costs will remain at record lows for at least another year.

Its latest inflation attitudes survey revealed the share of Britons expecting a hike in the next year sank to 37 per cent last month, the lowest for a year and down from a three-year high of 49 per cent in August.

Financial markets are not pricing in a move until late next year.

The recent plunge in oil and food prices has also brought down inflation expectations. These are monitored by the Bank’s monetary policy committee for signs of feeding into wage demands, or signalling that expectations of low inflation over the long term are becoming entrenched.

Respondents polled by the Bank expect the cost of living to average 2.5 per cent over the next year, down from 2.8 per cent in August and the lowest since February 2010.

On average the public thought the inflation rate was 2.8 per cent last month, more than twice as high as the Consumer Prices Index, which stood at 1.3 per cent in October.