MNI BRIEF: BOE Survey Shows Firms' Inflation Expectations Fell
The Bank of England's Decision Maker Panel survey showed firms' inflation and ouput price expectations fell but labour market pressures remain
The Bank of England's Decision Maker Panel business survey provided further evidence that inflation has peaked, with firms' output price and inflation expectations both declining in February from the previous month, although labour market price pressures were still clearly evident.
Firms' one year ahead CPI inflation expectations fell to 5.9% from 6.4% in January while three-year ahead ones fell to 3.4% from 3.7%. Firms' year ahead price expectations for their own output declined to 5.4% from 5.8% in January. The DMP survey, however, also provided support for policymakers who are concerned that a tight labour market will keep putting upward pressure on core inflation. (MNI INTERVIEW: Some Good Signs Amid Sluggish UK Growth-ONS)
While unit costs dipped to 9.8% in the year to February from 9.9% in January and were expected to fall to 7.0% over the coming year anticipated year-ahead wage growth held steady at 5.7% in February with actual annual wage growth up at 6.6% in February and 45% of firms stated that recruitment was much harder than usual.