LONDON, April 2 (Reuters) – British companies expect to raise prices more quickly in the coming 12 months as they respond to a surge in energy prices due to the Iran war and their expectations for wage growth cooled, a Bank of England survey showed on Thursday.
The BoE is keeping a close watch on companies’ pricing plans as it tries to gauge how much of the spike in energy prices caused by the Iran war will be passed on and push up inflation.
The monthly Decision Maker Panel showed firms polled in March expected to raise their prices by 3.7% over the next year, the most since October.
This rate was up from 3.4% among firms surveyed in February, before the start of the conflict, and represents the biggest month-to-month increase in the rate since April 2024.
BoE Governor Andrew Bailey told Reuters in an interview on Wednesday that firms had limited pricing power to pass on cost increases to their customers although some pass through of higher energy costs was likely.
Firms’ expected year-ahead wage growth fell to 3.5% on a three-month moving-average basis in March and 3.4% on a monthly basis, both the lowest since the series started in 2022.
(Reporting by Suban Abdulla; editing by David Milliken)
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