MNI BRIEF: BOE Survey Finds Output Price Inflation Turns Down

The Bank of England's latest business survey found evidence that pipeline inflation pressures have diminished and inflation is on the downpath (MNI INTERVIEW: Price Data Imply UK Inflation At Turning Point).

The June Decision Maker Panel survey noted firms' output price inflation dropped to 6.9% in June from 7.6% in May taking the three month average down to 7.3% The three-month moving average also fell from 7.6% to 7.3%. Output price inflation was expected to fall further, with year ahead expectations at 5.3% while year ahead CPI inflation expectations fell to 5.7% from 5.9% in May.

One discordant note was that three year ahead CPI inflation expectations ticked up to 3.9% from 3.7%. Wage growth expectations held pretty steady, rising to 5.3% from 5.2% in May with three-month average dipping to 5.3% from 5.4%. The data, while reinforcing the case that inflation has peaked, will leave the debate wide open over how far it is set to fall.