DMP survey shows continued slow progress towards disinflationary pressures

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).