The December DMP survey was conducted between 6 and 20 December and received 2,346 responses.
Firms reported that their output prices rose by an average annual rate of 3.8% in the three months to December, down 0.1 percentage points from 3.9% in the three months to November. Note that the DMP covers own prices from firms across the whole economy, not just consumer-facing firms.
Year-ahead own-price inflation was expected to be 3.8% in the three months to December, 0.1 percentage points higher than firms reported in the three months to November. Businesses therefore expect output price inflation to be the same a year from now based on three-month averages.
Perceived CPI inflation was 2.5% in the three months to December, down 0.1 percentage points from 2.6% in the three months to November. Expectations for CPI inflation a year ahead rose from 2.7% to 2.8% in the three months to December. The corresponding measure for three-year ahead CPI inflation expectations was 2.7% in the three months to December, 0.1 percentage points higher than the three months to November.
Firms reported that annual wage growth was 5.4% in the three months to December, 0.1 percentage points lower than in the three months to November. Expected year-ahead wage growth remained unchanged at 4.0% on a three-month moving-average basis in December. Firms therefore expect their wage growth to decline by 1.4 percentage points over the next 12 months based on three-month averages.
Firms continue to be asked about how they expect to respond to the increase in employer National Insurance contributions that were announced in the Autumn Budget. Firms were allowed to select more than one option. On average over the November and December surveys, 61% of firms expect to lower profit margins, 54% expect to raise prices, 53% expect lower employment and 39% expect to pay lower wages than they otherwise would have done.
Published on
09 January 2025
The DMP was set up in August 2016 and is run by the Bank of England in collaboration with King’s College London and the University of Nottingham. It was designed to be representative of the population of UK businesses. All results are weighted. See Bunn et al (2024) for more details.
The DMP receives funding from the Economic and Social Research Council.