UK firms cite easing price pressures as wage growth holds steady

4th Sep 2026 15:56

(Sharecast News) - UK businesses reported a further easing in price pressures in August, while wage growth remained stable, according to the latest Decision Maker Panel survey from the Bank of England.

The survey, which was conducted between 7 and 21 August, showed realised annual own-price growth fell to 3.7% in the three months to August, from 3.8% in the three months to July, while firms' expectations for their own-price inflation over the coming year also eased by 0.1 percentage points to 3.8%.

Expectations for broader consumer price inflation fell more sharply, with year-ahead CPI inflation expectations declining to 3.1% from 3.4% the month before. Three-year-ahead expectations were unchanged at 2.8%.

Meanwhile, annual wage growth held steady at 4.0%, while expected wage growth over the next 12 months was also unchanged at 3.4%. That implies firms expect wage growth to slow by 0.6 percentage points over the coming year.

The labour market showed some signs of stabilisation, with realised annual employment growth improving to -0.2% from -0.4%. Expected employment growth over the next year rose to 0.1% from -0.1%.

The survey also showed that fewer firms expected to raise prices in response to the recent energy shock, with the proportion falling to 59% in August from 64% in April. Meanwhile, 61% expected lower profit margins, down from 68% in April.