The results of the DMP survey showed that annual inflation expectations of British companies increased over a three-month period, while wage growth expectations decreased slightly, but remained close to its recent average.
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 November survey was conducted between 8 and 22 November and received 2,255 responses.
The data showed that annual inflation expectations of companies increased by 0.1% to 2.7%. Three-year ahead CPI inflation expectations remained unchanged (2.6%) compared to the three months to October. Meanwhile, year-ahead own-price inflation was expected to be 3.7% in the three months to November (+0.2% compared to the three months to October). Businesses therefore expect output price inflation to decline by 0.2% over the next 12 months based on three-month averages.
The survey also found that expected year-ahead wage growth dropped by 0.1% point to 4.0% on a three-month moving-average basis in November but remained close to its recent average. Annual wage growth was 5.5% in the three months to November (-0.1% compared to August-October). Firms therefore expect their wage growth to decline by 1.5% over the next 12 months based on three-month averages.