September 07, 2023 08:40 GMT
DMP data mixed - September hike still looking likely
- Mixed Decision Maker Panel data for August with expected wage growth and expected price growth both falling - but realised wage growth picking up a little further. However, overall this will probably be an encouraging report for the MPC, but in our view won't be enough to stop a September hike, and definitely keeps November on the table, too.
- The expected wage growth over the next year in the August dataset fell marginally from 4.995% to 4.979%, another new low since the series was restarted in May 2022. The 3-month average fell to 5.1% from 5.2% and continued its decline from a peak of 6.0%.
- However, the realised wage growth over the past year increased to 6.9% from 6.7% in July, but below the 7.1% in June. The 3-month average ticked up again marginally to a new high of 6.886% from marginally from 6.846% in July and 6.820% in June.
- Recruitment difficulties got a little harder than in July but expected employment growth fell (although remaining in positive territory).
- Firms' mean expected own price growth for the next year fell to 4.4% from 5.5% on the single month metric, the lowest since October 2021. The 3-month average fell to its lowest level since February 2022 at 4.9% (5.2% prior). The MPC will be encouraged by this.
- 3-year ahead CPI expectations fell back further to 3.2% from 3.3% in July from 3.7% in June (another new low since the series began in May last year).