Economic news

UK Companies Lower their Expectations for Price Growth: BoE Survey

LONDON, July 6 (Reuters) - British companies' expectations for selling price inflation cooled slightly in June and reached their lowest level since early last year, according to a survey by the Bank of England which is under pressure to bring down high inflation.

Expectations for output price inflation in the coming year fell to 5.3% in the three months to June from 5.4% in the three months to May - marking the lowest reading since March 2022, according to the BoE's monthly Decision Maker Panel.

The central bank is watching pricing expectations from businesses and consumers closely as it weighs further interest rate hikes to curb an inflation rate that held at 8.7% in May, the highest among the world's big, rich economies.

Companies' expectations for consumer price inflation - rather than their own selling prices - inched lower for the year ahead but increased in the medium-term to 3.7% in June from 3.5%, the highest reading since January, the BoE survey showed.

BoE Governor Andrew Bailey said in an interview broadcast on Thursday that there was evidence that some retailers were overcharging customers, especially for fuel.

The BoE has raised rates 13 times since late 2021 to 5%. Financial markets on Thursday pointed to a peak early next year of around 6.5%. The latest consensus of economists polled by Reuters pointed to rates reaching a high of 5.5%.

Reporting by Andy Bruce Editing by William Schomberg

Source: Reuters

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