Stable Pricing and Wage Growth Amidst Energy Shocks in UK Firms

The Bank of England's Decision Maker Panel survey for September 2026 has reported stable pricing, wage growth, and inflation expectations from UK firms. The survey covered 1,993 businesses across various sectors and found that realised annual own-price growth remained steady at 3.7% in the three months to September. Annual wage growth was also unchanged at 4.0%, while expected wage growth over the next 12 months held steady at 3.4%. However, employment growth remains slightly negative at -0.2%.

The survey showed that despite moderated price expectations, 57% of firms anticipate raising prices and 70% expect lower profit margins due to energy shocks. This suggests persistent cost pressures on businesses. Expected own-price inflation for the year ahead dipped slightly to 3.7%, while year-ahead CPI inflation expectations remained stable at 3.1%. Three-year-ahead CPI inflation expectations also stayed at 2.8%, indicating little change in how businesses view the broader inflation path.

The survey's findings are significant, as they provide insights into UK firms' pricing and wage growth strategies amidst ongoing energy shocks. The data will likely be closely watched by policymakers and investors, who may consider these signals when making decisions about interest rates and investments.