Even though inflation expectations moved down, latest survey by Bank of England (BOE) shows that people are more confident that rates are likely to move up over next 12 months. According to 4000 Britons surveyed, 38% of them expect rates to move up in a year, which is higher than 35% in November, last time of BOE survey but much lower than 50% seen during august survey.

However same survey shows, inflation expectations dropped to 1.8% over the next 12 months, which is lowest level of expectations since 1999. So it is natural that everyone take the improvement in hike expectations with a pinch of salt. Moreover inflation expectations over next two years dropped to 2.1% from 2.3%.

Even if the current conditions prevail analysts and economists do not expect BOE to move rates until the last quarter of the year and more likely to be next year.

Moreover in June 23rd referendum, if UK votes to leave European Union, that might even lead to a rate cut from Bank of England (BOE) to soothe the impact of uncertainties. Central bank has already announced that it would provide virtually unlimited credit lines to cover any short term funding gap.

Pound is little changed over the release, currently trading at 1.429 against Dollar.