UK Firms Report Easing Price Pressures and Stable Wage Growth

UK businesses reported easing price pressures in August, according to the Bank of England's Decision Maker Panel survey. Realised annual own-price growth fell to 3.7% in the three months to August, down from 3.8% in July.

Firms' expectations for their own-price inflation over the coming year also eased by 0.1 percentage points to 3.8%. Expectations for broader consumer price inflation fell more sharply, with year-ahead CPI inflation expectations declining to 3.1% from 3.4% the month before.

Annual wage growth held steady at 4.0%, while expected wage growth over the next 12 months was also unchanged at 3.4%. Firms expect wage growth to slow by 0.6 percentage points over the coming year, implying a reduction in pay increases.