Future Retirement Success
  • Politics
  • Business
  • Investing
  • Stocks
  • Politics
  • Business
  • Investing
  • Stocks

Future Retirement Success

Business

UK Wage and Price Growth Set to Slow, Bolstering Case for Interest Rate Cut

by June 7, 2024
June 7, 2024
UK Wage and Price Growth Set to Slow, Bolstering Case for Interest Rate Cut

Businesses in the UK are planning to moderate both wage and price increases over the coming year, potentially paving the way for a reduction in interest rates this summer. This trend was highlighted in the Bank of England’s latest decision-maker panel survey.

According to the survey, companies intend to raise pay by an average of 4.1 percent, a decrease from the 4.6 percent forecast in April. Similarly, prices charged by businesses, a key indicator of future inflation expectations, are predicted to rise by 3.8 percent over the next year, down from a previous forecast of 4.2 percent.

These figures suggest that businesses believe inflationary pressures are easing, potentially leading to lower wage demands from workers. Data from the Office for National Statistics indicates that wages have been increasing at an average rate of around 6 percent over the past year.

The Bank of England is currently considering when to implement its first interest rate cut since March 2020, following a series of increases that have brought the base rate to 5.25 percent, a 16-year high. The latest inflation data, which showed a decrease to 2.3 percent in April from 3.2 percent in March, has exceeded the Bank’s forecasts.

Although services inflation—a critical measure of domestic inflation trends—dropped slightly to 5.9 percent from 6 percent, it remained higher than expected. This sector’s inflation is closely monitored by the Bank for signs of underlying inflationary pressures within the economy.

Speculation among investors suggests that borrowing costs could be reduced over the summer, potentially as early as August, if further data confirms a continued decrease in price growth towards the Bank’s 2 percent target. Recent data indicated that inflation in the services sector has slowed to its weakest pace in three years.

Rob Wood, chief UK economist at Pantheon Macroeconomics, noted, “The decision-maker panel joins a clutch of surveys in signalling that tight monetary policy continues to bear down on inflation pressure. Easing inflation and recruitment difficulties well down from last year suggest that ratesetters can begin gradually easing the restrictiveness of monetary policy soon. We expect [the Bank’s ratesetting monetary policy committee] to cut Bank rate by 25 basis points in August and again in November.”

The anticipation of these adjustments reflects growing confidence that the UK economy is stabilising, providing the Bank of England with the scope to start easing monetary policy in the coming months.

Read more:
UK Wage and Price Growth Set to Slow, Bolstering Case for Interest Rate Cut

0
FacebookTwitterGoogle +Pinterest
previous post
Technology Sector Participation Is Fading
next post
Institute of Directors Introduces Code of Conduct for Business Leaders

You may also like

UK workforce split on working from home as...

November 12, 2024

How Therapy Can Support Your Personal Growth

February 20, 2024

No F1, No F1, it’s just not right:...

June 22, 2024

UK government announces £4m AI funding to cut...

August 16, 2023

Exploring the Relationship Between Sleep and Academic Performance

April 24, 2024

UK vacuum cleaner innovators secure six-figure investment in...

November 3, 2022

Delay to new sign language GCSE branded ‘a...

February 6, 2025

Lightning the Digital Workload

September 18, 2023

Growing numbers sign up to access their pay...

August 8, 2022

How Mojo App helps Companies to reach Customers...

January 13, 2023

    Get free access to all of the retirement secrets and income strategies from our experts! or Join The Exclusive Subscription Today And Get the Premium Articles Acess for Free

    By opting in you agree to receive emails from us and our affiliates. Your information is secure and your privacy is protected.

    Recent Posts

    • Copper Tariffs Are the New Steel Tariffs

      July 16, 2025
    • New Evidence Underscores the Value of Tobacco Harm Reduction

      July 16, 2025
    • Former DC councilmember wins back seat months after being expelled over bribery charge

      July 16, 2025
    • Senate marches toward passing Trump’s $9B clawback bill after dramatic late-night votes

      July 16, 2025
    • Clearing the Air on Particulate Matter Regulation

      July 16, 2025
    • Four Symbols, One Big Message: What the Charts are Telling Us

      July 16, 2025

    Categories

    • Business (8,499)
    • Investing (2,126)
    • Politics (16,072)
    • Stocks (3,214)
    • About us
    • Privacy Policy
    • Terms & Conditions

    Disclaimer: futureretirementsuccess.com, its managers, its employees, and assigns (collectively “The Company”) do not make any guarantee or warranty about what is advertised above. Information provided by this website is for research purposes only and should not be considered as personalized financial advice. The Company is not affiliated with, nor does it receive compensation from, any specific security. The Company is not registered or licensed by any governing body in any jurisdiction to give investing advice or provide investment recommendation. Any investments recommended here should be taken into consideration only after consulting with your investment advisor and after reviewing the prospectus or financial statements of the company.

    Copyright © 2025 futureretirementsuccess.com | All Rights Reserved