Monthly Decision Maker Panel data - August 2024

The August DMP survey was conducted between 2 and 16 August and received 2,185 responses.

Firms reported that their output prices rose by an average annual rate of 4.0% in the three months to August, down 0.3 percentage points from 4.3% in the three months to July. Note that the DMP covers own prices from firms across the whole economy, not just consumer-facing firms.

Year-ahead own-price inflation was expected to decline to 3.6% in the three months to August, 0.1 percentage points lower than firms reported in the three months to July. Businesses therefore expect output price inflation to decline by 0.4 percentage points over the next 12 months based on three-month averages.

Expectations for CPI inflation a year ahead remained unchanged at 2.7% in the three months to August compared to the three months to July. The corresponding measure for three-year ahead CPI inflation expectations was also 2.7% in the three months to August. There is now little difference between firms’ 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 August. Annual wage growth was 5.8% in the three months to August, 0.1 percentage points lower than in the three months to July. Firms therefore expect their wage growth to decline by 1.7 percentage points over the next 12 months based on three-month averages.

Firms reported annual employment growth of 0.7% in the three months to August, lower than the 0.9% reported in the three months to July and substantially lower than the 2.4% reported at the start of 2024. This suggests that the UK labour market is continuing to loosen.  Expected year-ahead employment growth fell by 0.1 percentage points to 1.0% in the three months to August, and this was also lower than the 1.6% reported at the start of the year.

Uncertainty fell in August with 45% of firms reporting that the overall level of uncertainty facing their businesses was high or very high, 8 percentage points lower than in July. Sales and price uncertainty continued to decline.