Key facts
- UK businesses expect 4.0% price growth in the next 12 months.
- This is a decrease from April's two-year high of 4.4%.
- The Bank of England's Decision Maker Panel survey revealed the findings.
- Subsiding energy price shock is cited as a reason for the expected slowdown.
- Expected year-ahead wage growth held steady at 3.4% on a three-month moving-average basis.
- Businesses planned to reduce employment levels by 0.4% over the next 12 months.
A survey by the Bank of England's Decision Maker Panel indicates that British businesses are anticipating a slower rate of price increases over the next year. Companies surveyed expect prices to grow by 4.0% in the coming 12 months, down from April's two-year high of 4.4%. This moderation is attributed to the subsiding energy price shock, partly influenced by geopolitical events. On a three-month moving-average basis, price expectations rose to 4.0%, the highest since February 2025. Expected year-ahead wage growth held steady at 3.4% on a three-month moving-average basis, its joint-lowest since July 2022. Additionally, businesses planned to reduce employment levels by 0.4% over the next 12 months, the biggest planned reduction in six months. The survey suggests that second-round effects through firms' inflation expectations appear muted for now, with weaker job growth.