UK firms expect to raise their prices slightly less sharply over the coming year, according to the Bank of England’s latest Decision Maker Panel survey.
Businesses put their expected annual price growth at 3.8% in the three months to August, down from 3.9% in the previous three-month period. Expectations for wage growth over the next year were unchanged at 3.4%.
The figures offer limited reassurance for policymakers as they assess whether inflationary pressures are beginning to ease, despite the impact of higher energy costs linked to conflict in the Middle East.
The Bank of England’s survey is based on responses from financial officers at small, medium-sized and large companies across a broad range of industries. It is designed to represent the wider population of UK businesses and covers prices charged throughout the economy, rather than only those paid by consumers.
The central bank has been monitoring firms’ pricing decisions and wage plans closely as it considers the risks that higher energy costs could feed through into broader inflation.
Bank Rate currently stands at 3.75%, after the Monetary Policy Committee voted to leave it unchanged in July. Its next interest-rate decision is due on 17 September.
