BoE lift hopes on inflation.

A monthly survey of chief financial officers from small, medium and large companies showed that selling price growth expectations for the year ahead dropped to 5.7 per cent in November, from 6.2 per cent in the previous month. The figures, published yesterday, mark a significant fall from a September peak of 6.7 per cent, reaching their lowest level since February, just before Russia’s invasion of Ukraine sent global gas and commodity prices soaring. Falling inflation expectations might give the BoE’s Monetary Policy Committee «a little bit of space to breathe, particularly when the economic outlook has deteriorated», added Dickens. The economy shrank 0.2 per cent in the third quarter of 2022, with the Office for Budget Responsibility, the fiscal watchdog, expecting recession to persist until the end of next year.

Dickens expects the MPC to take «a more dovish outlook», with bank rate rises halting at a peak of 4 per cent midway through 2023. Wage growth expectations were also down to 5.8 per cent in November, from a peak of 5.9 per cent in September, the BoE’s survey showed.

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