British companies reported steady price inflation expectations but softer hiring trends in August, according to the latest Bank of England (BoE) survey on Thursday.
The Decision Maker Panel (DMP) survey, conducted between August 8 and 22 with 2,126 respondents, found that realized annual own-price growth edged up 0.1 percentage points to 3.7% in the three months to August.
Year-ahead own-price inflation expectations held at 3.7%, indicating firms see pricing pressures staying stable over the next 12 months.
Expectations for year-ahead CPI inflation edged up by 0.1 percentage points to 3.3% on a three-month average basis, while the single-month reading increased by 0.2 percentage points to 3.4%.
Three-year ahead CPI inflation expectations rose for the first time since January, climbing 0.1 percentage points to 2.9%.
Wage growth showed signs of cooling, with firms reporting annual wage increases of 4.6% in the three months to August, down 0.1 percentage points from July.
Year-ahead wage growth expectations held steady at 3.6% on a three-month average basis, while the single-month figure dipped to 3.5%. This indicates companies expect wage growth to moderate by 1 percentage point over the coming year.
Employment trends weakened significantly, with realized annual employment growth falling to -0.5% in the three months to August, a 0.4 percentage point decline from July. Forward-looking employment expectations also deteriorated, dropping 0.3 percentage points to just 0.2%.
The survey also examined how businesses adjusted to April’s increase in employer National Insurance contributions.
Most firms (66%) reported lowering profit margins in response, while 46% reduced employment, 34% raised prices, and 20% paid lower wages than they otherwise would have. Fewer companies reported increasing prices, cutting jobs, or reducing wages than had been anticipated before the changes took effect.
Source :
https://www.investing.com/news/economy-news/uk-firms-report-stable-price-inflation-lower-employment-growth-4224265
