UK: DMP pricing intentions high and stable

Research evidence excerpt

UK: DMP pricing intentions high and stable

J P M O R G A N Europe Economic Research

03 July 2026

UK: DMP pricing intentions high

and stable

• Business perceptions of near-term CPI inflation fell back in June, but their Economic and Policy Research

own pricing intentions for the year ahead remain very high at 4.0% Allan Monks

• PMI pricing readings have eased, but also remain high. Such surveys (44-20)allan.j.monks@jpmorgan.com7134-8309

continue to divide the MPC J.P. Morgan Securities plc

• Upcoming CPI outturns - which have softened recently - will provide a key

test as to whether these elevated intentions are translating into actual

pricing decisions

The BoE’s closely watched DMP survey of businesses was conducted between 5th

and 19th June, meaning some but not all responses will have reflected on the news

of a US/Iran deal and the drop in oil prices.

The June survey showed year-ahead expectations of businesses’ own price growth

holding at 4.0% (although before rounding, there was actually a 0.1%-pt rise to

4.049%). This comes as a modest upside surprise and leaves this reading

comfortably higher than the pre-war level of 3.4%. Regardless of the war, this part

of the DMP was already way too high to be be consistent with the inflation target;

before the pandemic it averaged 2.3%. This has tended to correlate with measures

of underlying services inflation.

The DMP contains readings of businesses’ broader expectations of CPI inflation.

Year ahead expectations fell from 3.7% to 3.3%, indicating a response to lower

energy prices. But three-year-ahead CPI expectations held steady at 2.9%, and

remain high.

Expected wage growth for the year ahead nudged a tenth higher to 3.5%. This has

essentially been stable compared to levels at the start of the year, although it is still