British firms expect the prices they charge to rise by 3.8 per cent over the coming year, while wage growth is expected to slow, according to the Bank of England's latest Decision Maker Panel survey, published on 30 October 2026.

The survey, conducted between 2 and 16 October, received 1,945 responses from chief financial officers. Firms reported that their own prices had already risen by 3.8 per cent in the three months to October, up 0.1 percentage points from the three months to September. On the same three-month average basis, they expect output price inflation to be unchanged over the next year.

Inflation expectations edge higher

Expectations for year-ahead consumer price inflation rose to 3.3 per cent in the three months to October, up from 3.1 per cent in the three months to September. Expectations for inflation three years ahead were unchanged at 2.8 per cent. The figures remain above the Bank's 2 per cent target and will be closely watched by policymakers, who meet next week to set interest rates.

Wages expected to cool

Firms reported that annual wage growth was 3.9 per cent in the three months to October, down 0.1 percentage points from the three months to September. Expected wage growth over the next year was unchanged at 3.4 per cent, implying firms expect pay growth to fall by 0.5 percentage points over the coming 12 months.

A separate Bank survey of its regional agents found businesses expected average pay settlements for 2027 to be around 3.6 per cent, similar to this year's level.

Employment growth remained weak, with firms reporting annual employment growth of minus 0.5 per cent in the three months to October.