MNI BRIEF: Sharp UK Output Price Inflation Fall In Dec - BOE

The Bank of England's Decision Maker Panel survey revealed a sharp decline in firms' output price inflation in December, as the year-on-year rate fell 1.1 percentage points from November to 4.9%.

The three-month-on-a year-ago decline through December rate eased to 5.9% from 6.6% in the three months through November but the survey highlighted easing pipeline inflation pressures.

Inflation expectations, typically driven at least in part by inflation outturns, also declined, with one-year ahead expectations falling to 4.0% in December from 4.4% in November and three year expectations in the three months to December falling to 3.1% from 3.2% in November.

The survey nevertheless showed signs of second-round inflation effects. Wage inflation was historically high in 2023, at 6.9% in the three months to December, with firms expecting 5.2% a year ahead on a three monthly basis.