British employers’ expectations for wage growth held at their joint-lowest in nearly four years in February, according to a survey published by the Bank of England, which is looking out for further signs of a slowdown in pay pressure before it next cuts interest rates.
Expected year-ahead wage growth remained at 3.6% on a three-month moving-average basis in February, the joint-lowest reading since the series started in 2022, the monthly Decision Maker Panel survey showed on Thursday.
Companies’ expectations for how much they would raise their own prices in the coming 12 months inched down, falling by 0.1 percentage points to 3.4% in the three months to February.
Companies also said they expected to expand staffing levels by 0.1% over the coming year.
The central bank is closely monitoring wage growth as it tries to gauge how much inflation pressure remains in the economy and is expected to keep interest rates at 3.75% this month after holding them in February.
Investors trimmed their bets on interest rate cuts by the Bank of England this week and are only pricing in one quarter-point cut this year as the U.S.-Israeli war on Iran continued to stoke fears about inflation.
The BoE survey was conducted before the most recent Middle East conflict started.
(Reporting by Suban Abdulla; editing by David Milliken)
