The September DMP survey was conducted between 6 and 20 September and received 2,218 responses.
Firms reported that their output prices rose by an average annual rate of 4.2% in the three months to September, up 0.2 percentage points from 4.0% in the three months to August. Note that the DMP covers own prices from firms across the whole economy, not just consumer-facing firms.
Year-ahead own-price inflation remained unchanged at 3.6% in the three months to September. Businesses therefore expect output price inflation to decline by 0.6 percentage points over the next 12 months based on three-month averages.
Expectations for CPI inflation a year ahead declined by 0.1 percentage point to 2.6% in the three months to September. The corresponding measure for three-year ahead CPI inflation expectations was also 2.6% in the three months to September, and 0.1 percentage points lower than in the three months to August. There is now little difference between firms’ current CPI inflation perceptions and expectations one and three years ahead.
Expected year-ahead wage growth remained unchanged at 4.1% on a three-month moving-average basis in September. Annual wage growth was 5.7% in the three months to September, 0.1 percentage points lower than in the three months to August. Firms therefore expect their wage growth to decline by 1.6 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 6.9% in the three months to September, unchanged from the three months to August. Over the next year, firms expect the average interest rate on their borrowing to fall to 6.1% based on data from the three months to September, 0.1 percentage points higher than in the three months to August.
Uncertainty fell in the three months to September with 48% of firms reporting that the overall level of uncertainty facing their businesses was high or very high, one percentage point lower than in the three months to August. In September, the three-month average sales uncertainty remained unchanged, but the three-month average price uncertainty fell.