BOE: Decision maker panel survey highlights lofty inflation expectations – Reuters

Dhwani Mehta FXStreet

The latest survey conducted by the Bank of England (BOE) decision maker panel (DMP) showed that inflation expectations are seen bumping up sharply in the coming months, per Reuters.

Key findings

Over the past 12 months to June, average unit costs were estimated to have increased by 9.5%.

Over the next 12 months, firms expected unit cost growth to be 8.2%.

Perceptions of current CPI inflation averaged 8.7% in the June survey, 0.3pp lower than the official ONS CPI inflation rate.

Looking ahead, DMP members expected CPI inflation to be 7.4% one-year ahead and 4.0% in three years' time.

88% of firms reported they were finding it harder to recruit new employees compared to normal.

58% of respondents reported that uncertainty for their business was 'high' or 'very high' at the moment, 4 percentage points higher than in May.

Market reaction

GBP/USD is unperturbed by the BOE survey results, as the pound continues to sink on news that UK PM Boris Johnson is set to announce his resignation amidst the ongoing political drama.

The pair is trading at 1.1965, still up 0.32% on the day, having faced rejection at 1.1995.

Author

Dhwani Mehta

FXStreet

Residing in Mumbai (India), Dhwani is a Senior Analyst and Manager of the Asian session at FXStreet. She has over 10 years of experience in analyzing and covering the global financial markets, with specialization in Forex and commodities markets.

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