Yr-ahead wage growth now seen at 4.5% vs 4.8% in April (Il Sole 24 Ore Radiocor) - London, 06 Jun - Expectations of UK companies for one-year ahead consumer prices remained unchanged at 2.9% in May, the same level reported in April, while CPI expectations three years ahead were also steady at 2.6%, according to the latest Decision Maker Panel survey released by the Bank of England.

The survey was conducted between May 10-24 and received 2,317 responses.

In the three months to May, CPI expectations inched down 0.1 percentage points to 3.0% and in the three-year ahead period they were also down 0.1 point at 2.6%.

Expected year-ahead wage growth fell by 0.3 percentage points to 4.5% on a three-month moving-average basis in May. Annual wage growth was 6.0% in the three months to May, down 0.2 percentage points from the three months to April. Firms therefore expect their wage growth to decline by 1.5 percentage points over the next 12 months based on three-month averages.

Businesses expect their output price inflation to decline over the next year. Year-ahead own-price inflation was expected to be 3.9% in the three months to May, down from 4.0% in the three months to April. Output price inflation is, therefore, expected to decline by 1 percentage point over the next 12 months based on three-month averages.

Firms reported annual employment growth of 1.5% in the three months to May, lower than the 1.7% reported in the three months to April. Expected year-ahead employment growth was unchanged at 1.3% in the three months to May.

Firms reported that the average interest rate that they were paying on their borrowing (both bank and market based) was 6.6% in May, 0.4 percentage points lower than reported in April. Over the next year, they expect the average interest rate on their borrowing to decline to 5.7%, 0.3 percentage points lower than they expected for the year ahead in April.

AAA-Sch

(RADIOCOR) 06-06-24 11:10:04 (0241) 5 NNNN