The results of the DMP survey showed that annual inflation expectations of British companies declined in the three months to September, while wage growth expectations remained unchanged compared to the previous three-month period. The data also showed that uncertainty among businesses was slightly lower than in the June to August period.
The Decision Maker Panel (DMP) is a survey of Chief Financial Officers from small, medium and large UK businesses. The central bank uses it to monitor developments in the economy and to track businesses’ views. The September survey was conducted between 6 and 20 September and received 2,218 responses.
The data showed that annual inflation expectations of companies fell 0.1% to 2.6%. Three-year ahead CPI inflation expectations also fell by 0.1% compared to June-August, to 2.6%. Meanwhile, year-ahead own-price inflation remained unchanged at 3.6% in the three months to September. Businesses therefore expect output price inflation to decline by 0.6% over the next 12 months based on three-month averages.
The survey also found that expected year-ahead wage growth remained unchanged at 4.1% on a 3-month moving-average basis in September. Annual wage growth was 5.7% in the three months to September (-0.1% compared to June-August). Firms therefore expect their wage growth to decline by 1.6% points over the next 12 months based on three-month averages. Meanwhile, over the next year, firms expect the average interest rate on their borrowing to decline to 6.1% (-0.1% compared to June-August). The data also showed that 48% of firms reported that the overall level of uncertainty facing their businesses was high or very high, 0.1% lower than in the three months to August.