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DMP survey shows continued slow progress towards disinflationary pressures

UK DATA

The BOE DMP survey showed reducing pressure on wage growth, price growth and unit costs growth, but still only at a moderate pace. While expected employment growth remained steady and realised employment growth fell on a 3ma basis, but saw an uptick in the single month measure.

  • The 3-month average of expected wage growth declined 0.3ppt to 4.5%/Y in the 3-months to May 2024, down from 4.8%Y/Y in the 3-months to April. The last three 3ma readings have now all been below 5%, and this followed 8 consecutive periods of either 5.1%Y/Y or 5.2%Y/Y (and was higher for the 10 periods before that). This is the lowest print of since the survey was begun in May 2022.
  • Realised wage growth fell to 6.0%Y/Y in the 3-months to May, a 0.2ppt fall from April in a gradual decline seen since the 6.9%Y/Y in the 3-months to January (and from a peak of 7.0%Y/Y in the 3 months to November). This was the lowest since August 2022 (but the single month print increased to the same 6.1%Y/Y seen in March and 5.9%Y/Y - the first time it has been below 6% since July 2022).
  • The single month figure for realised employment growth increased from 1.0% in April to 1.7% in May (returning to March levels). This was still below February's 2.3% print, however, so the 3-month average has fallen by 0.2ppt to 1.5% (and follows two consecutive falls of 0.3ppt). This is the lowest 3-month average since the 3-months to November 2021.
  • Expected employment growth has remained steady at 1.3%Y/Y in the 3-months to May (and remaining below Nov23-Mar24 levels).
  • Expected price growth declined further to 3.9% in the 3-months to May, down 0.1ppt from last month, and from a peak of 6.6%Y/Y in September 2022. The single month reading for mean expected price growth was 3.8%Y/Y in May, down from 4.2%Y/Y in April but a little higher than the 3.7%Y/Y in March.
  • The survey also included questions on unit cost growth for the first time since July 2023. Realised unit cost growth was 6.2%Y/Y (down from 9.5%Y/Y in July 2023) while expected unit cost growth was 5.4%Y/Y (down from 6.8%Y/Y in July 2023).

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