UK businesses forecast lower wage growth over the next year to 4.9%

BoE Decision Maker Panel

UK business executives have forecast an upcoming ease in wage growth pressures, according to the Bank of England’s monthly Decision Maker Panel (DMP).

Among the 2,422 responses, executives said they expect wage growth for the year ahead to decline to 4.9% on a three-month moving-average basis. Annual wage growth was 6.4% in Q1 2024, marking a 0.3 percentage point drop from the three months to February. As a result, the wage growth for the next 12 months is expected to fall by 1.5 percentage points, based on three-month averages, the DMP found. Bank of England warns of sharp correction risk of 'stretched' asset prices Similarly, employment growth is expected to follow a similar path, although the drop was forecast to be smaller...