Britons Expect Income to Hold Up Amid Darker Times for Economy

(Bloomberg) -- British households see their income and spending holding up next year even though expectations for the economy are subdued, according to a Bank of England survey.

Consumers’ income expectations over the next 12 months have remained flat over the last year, the BOE said Friday, though there’s a widening gap with their outlook for the general economy. That’s been a trend since the 2016 Brexit vote, and the divergence appears to be driven “by those who reported feeling negative about the referendum result,” the report said.

BOE policy makers predict wages and spending to pick up and say they’re on a path to raising interest rates if the country’s divorce from the European Union goes smoothly. On Thursday, the BOE kept its benchmark interest rate unchanged at 0.75 percent and said Brexit uncertainties have “intensified considerably.”

The proportion of households reporting being very concerned about debt was broadly unchanged, the report showed. The bank’s increase in interest rates in August has already been passed through to the majority of floating-rate mortgages.

To contact the reporter on this story: Jill Ward in London at jward98@bloomberg.net

To contact the editors responsible for this story: Fergal O'Brien at fobrien@bloomberg.net, Brian Swint, Andrew Atkinson

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