UK firms expect selling price pressure to cool but not wages, BoE survey shows

British companies expect to raise selling prices by smallest amount in nearly three years but w growth shows sign of cooling, a survey showed on Thursday in mixed news for Bank of England officials gauging inflation pressures.

BoE's Decision Maker Panel, which is closely watched by members of Monetary Policy Committee, showed businesses during three months to August expected selling prices to increase by 3.6 per cent over next year, lowest reing since September 2021 and down from 3.7 per cent previously.

But forecasts for w growth - a crucial metric for BoE as it monitors price pressure - remained at 4.1 per cent during three months to August, unchanged from July survey.

single-month reings showed forecasts have remained at 4.0 per cent to 4.1 per cent since May, meaning sharp drop in w growth expectations over previous 18 months appears to have stalled.

Stubbornly high w growth tops list of concerns among hawks on MPC, who worry that it will bake inflation pressure into ecomy on a longer term basis.

survey also showed that uncertainty felt by companies fell in aftermath of Prime Minister Keir Starmer's landslide election win, sinking to its lowest level since just before COVID-19 pandemic swept Britain.

Investors see a roughly one-in-four chance that BoE will cut interest rates at its September 12 policy anuncement, although a cut is fully-priced for vember.

Last month, BoE Goverr Andrew Bailey said he thought longer-term inflation pressures were easing but furr interest rate cuts would t be rushed because it was still too soon to be sure inflation was beaten.