Bank of England Survey: UK Firms Expect Price Hikes Amid Middle East Conflict

A survey released by the Bank of England on Friday indicates that UK businesses anticipate a faster rate of price increases compared to levels before the Middle East conflict, while wage growth is expected to slow. According to Jin10, the Bank of England's regional agents noted in another report that despite concerns over the conflict, 'few firms currently report significant impacts on their output, business activities, and plans.' The survey, conducted from April 2 to 17, involved approximately 2,030 chief financial officers. Since the late February attack on Iran, energy prices have surged and remained high. The survey found that businesses expect prices to rise by 3.8% over the next 12 months, up from 3.5% in March. Companies reported a 3.7% increase in pricing over the year ending in April. Signs of rising inflation expectations are likely to concern Bank of England policymakers, who are set to meet next week to formulate policy, with expectations to maintain the key interest rate at 3.75%.