The latest survey conducted by the Bank of England (BoE) decision maker panel (DMP) showed on Thursday that “businesses’ expectations for their own-price inflation declined in February,” per Reuters.
Key findings
Businesses expected their output prices to increase by an average 5.4% over the next year, down 0.4% from the previous month.
DMP members’ one-year ahead CPI inflation expectations decreased to 5.9%, down from 6.4% in January.
Three-year ahead cpi inflation expectations also declined to 3.4% in February, from 3.7% in January.
Expected year-ahead wage growth remained at 5.7% in February.
Businesses reported that unit costs had grown by 9.8% in the year to February, down from 9.9% in January.
Recruitment difficulties started to rise again in February, with 45% of firms were finding recruitment ‘much harder’ than usual.
Overall business uncertainty continued to decline in February.
Market reaction
The BoE DMP Survey fails to move a needle around the GBP/USD pair, leaving it in deep losses at around 1.1978. The pair hit daily lows at 1.1956 earlier in the session.
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