The February DMP survey was conducted between 2 and 16 February and received 2,373 responses.
Firms reported that their output prices rose by an average annual rate of 5.4% in the three months to February, down from 5.6% in the three months to January. Note that the DMP covers own prices from firms across the whole economy, not just consumer-facing firms.
Businesses expect their output price inflation to decline over the next year. Year-ahead own-price inflation was expected to be 4.3% in the three months to February, unchanged from the three months to January. Output price inflation is, therefore, expected to decline by 1.1 percentage points over the next 12 months based on three-month averages.
One-year ahead CPI inflation expectations declined further to 3.3% in February, down from 3.4% in January. The three-month average fell by 0.3 percentage points to 3.6% in February. Three-year ahead CPI inflation expectations also fell to 2.8% in the three months to February, 0.1 percentage points lower than reported in the three months to January.
Firms reported annual employment growth of 2.3% in the three months to February, lower than the 2.4% reported in the three months to January. Expected year-ahead employment growth was 1.6% in the three months to February, down 0.1 percentage points from the three months to January.
Expected year-ahead wage growth remained unchanged at 5.2% on a three-month-moving-average basis. Annual wage growth was 6.7% in the three months to February, down 0.1 percentage point from the three months to January. Firms therefore expect their wage growth to decline by 1.5 percentage points over the next 12 months based on three-month averages.
Firms reported that the average interest rate that they were paying on their borrowing (both bank and market based) was 6.7% in February, 0.1 percentage points lower than reported in January. Over the next year firms expect the average interest rate on their borrowing to decline to 5.8%, but this still remains significantly higher than the interest rate of 3.6% that firms had previously reported paying at the end of 2021.