According to the latest survey conducted by the Bank of England, British businesses have said that the price pressure is cooling down. But the survey has also earned about lower investment and employment in the country.
These days, one of the major indicators that are closely watched by the BoE is inflation. In fact, they are basing their decision for interest rate hikes on this indicator!
On average, businesses increased the prices by almost 7.2% during the 12 months leading up to November. Looking ahead, they believe that the prices are expected to rise by around 5.7% in the next year.
Experts believe that this survey will be closely watched by the Bank of England as it provides insight into the current situation of inflation in the country. And it is only after looking at the inflation that the central bank will decide on its interest rates policy.
During August, the inflation was at its peak for British consumers, but it seems that the inflation has started to go down.
On Thursday, the PMI data was also released, which showed that the factory output prices in the UK were increasing at a very slow pace. In fact, a slow pace such as this was only seen since the March of 2021!
If we talk about the CPI, in particular, it was at an all-time high when looking at the past 41 years. During October, the CPI reading was 11.1% which was way higher than the 2% target set by the Bank of England.
Looking ahead, experts believe that the producer prices, as well as the CPI, will remain higher than the targets set by the Bank of England. But if the supply chain disruptions are sorted on a global scale, and the oil prices decrease, it would also bring the inflation lower.