Published by Global Banking & Finance Review®
Posted on April 3, 2025
2 min readLast updated: January 24, 2026
Add as preferred source on GoogleUK businesses' inflation expectations hit a one-year high, causing concern for the BoE. Wage growth remains steady, with minimal employment growth expected.
LONDON (Reuters) -British businesses' expectations for inflation hit a one-year high in March, according to a Bank of England survey on Tuesday that will likely add to policymakers' anxieties about the persistence of price pressures.
The BoE's Decision Maker Panel showed companies in the three months to March expected consumer price inflation of 3.2%, up from 3.1% in the three months to February and marking the highest reading since the three months to March 2024.
The reading is likely to add to unease among the BoE's policymakers that inflation expectations have crept higher, with the surveys of the public showing similar increases.
On Tuesday BoE rate-setter Megan Greene said rising inflation expectations were a concern, but were not yet "flashing red lights".
Members of the Monetary Policy Committee are likely to take more heart from other parts of the BoE's survey.
Businesses expected wage growth of 3.9% over the coming year in the three months to March, unchanged from their expectations in the quarter before.
Companies planned to increase their own prices by 3.9%, 0.1 percentage points less than in February.
The BoE survey showed employers expect employment to grow by just 0.1 percentage points in the next 12 months.
That was unchanged from expectations in the three months to February and 1 percentage point below expectations for the year ahead in the three months to October, before finance minister Rachel Reeves announced a rise in employers' social security contributions.
(Reporting by Andy Bruce, editing by Suban Abdulla)
The article discusses UK businesses' rising inflation expectations and the Bank of England's concerns over persistent price pressures.
Businesses expect to raise prices by 3.9% and maintain wage growth at 3.9%, with minimal employment growth.
The BoE is concerned about rising inflation expectations but does not see them as critical yet.
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