NEARLY half of people now expect benchmark UK interest rates to rise over the next 12 months, a survey from the Bank of England has shown.

In the latest quarterly survey of the public's inflation attitudes, conducted for the Old Lady of Threadneedle Street by pollster GfK NOP and published yesterday, 49 per cent of respondents expected UK base rates to rise over the next 12 months.

This was significantly higher than in the previous quarterly survey in May, when 42 per cent of people forecast a rise in benchmark interest rates over a 12-month timeframe.

UK base rates have been at a record low of 0.5 per cent since March 2009.

In the latest survey, 29 per cent of people said rates might stay about the same over the next 12 months. This was down sharply from the 36 per cent of respondents expressing such a view in the May survey.

Respondents' median expectation of the rate of annual UK consumer prices index inflation over the coming year was 2.8 per cent, up slightly from 2.6 per cent in the May survey. Official figures published last month showed annual CPI inflation fell from 1.9 per cent in June to 1.6 per cent in July.

Many economists forecast the first rise in base rates will come by the early part of next year.

Recent economic indicators are perceived to have reduced the chances of an increase in benchmark borrowing costs by the end of 2014.