Year-ahead output price inflation was expected to be 5.5% in the three months to April. That was unchanged from the three months to March, although there was an increase from 5.3% to 5.9% in the more volatile single month data for April. Realised output price inflation stood at 7.7% in the three months to April, so businesses expect output price inflation to fall over the next year. Note that the DMP covers own prices from firms across the whole economy, not just consumer-facing firms.
In March, one-year CPI inflation expectations fell slightly. DMP members expected CPI inflation to be 5.6% one-year ahead, down from 5.8% in March and continuing the downward trend seen over recent months. Three-year ahead CPI expectations fell by 0.1 percentage point to 3.4% in April, from 3.5% in March.
In April, 47% of firms reported that the overall level of uncertainty facing their business was high or very high. That was unchanged from March, although this measure of uncertainty has been steadily falling for the past 6 months. Price uncertainty also continued to decline, although the level remains historically high.
The average effective interest rate on all borrowing (both bank and market based) was reported to be 6.0% in March, 2.5 percentage points higher than at the end of 2021. Respondents expected no change to borrowing rates over the year-ahead.
The DMP was set up in August 2016 by the Bank of England together with academics from Stanford University and the University of Nottingham. It was designed to be representative of the population of UK businesses. All results are weighted. See Bloom et al (2017) for more details.
The DMP receives funding from the Economic and Social Research Council.