The January DMP survey was conducted between 6 and 20 January and received 2,520 responses.
Businesses’ expectations for their own-price inflation were broadly unchanged in January. Over the next year, businesses expected their output prices to increase by an average 5.8%, unchanged from the previous month, although the three-month average fell slightly from 5.9% to 5.8%. Note that the DMP covers own prices from firms across the whole economy, not just consumer-facing firms.
Expectations for CPI inflation fell. DMP members expected CPI inflation to be 6.4% one-year ahead in January, down from 7.4% in the December survey. Three-year ahead CPI inflation expectations also decreased by 0.3 percentage point to 3.7%.
In January, businesses expected unit costs to grow at 8.0% over the coming year, down from 8.1% in December. Realised unit cost growth was estimated to have fallen from 10.1% to 9.9%.
Expected year-ahead wage growth also fell by 0.6 percentage points to 5.7% in January. Realised annual wage growth was 6.3% in January, a decrease of 0.3 percentage points on the month.
Recruitment difficulties continued to ease in January, with 35% of firms currently finding recruitment ‘much harder’ than usual, the lowest proportion since the question was introduced in October 2021 after peaking at 66% in June 2022. Expectations for year-ahead employment growth also edged down by 0.7 percentage points to 1.2% in January, and were weaker than realised employment growth, which was 3.4% in the year to January.
Overall business uncertainty remained unchanged in January, with 57% of firms reporting that uncertainty for their business was ‘high’ or ‘very high’. Uncertainty around the outlook for businesses’ expectations for their own-price growth remains historically high.