Monthly Decision Maker Panel data - January 2024

The Decision Maker Panel (DMP) is a survey of Chief Financial Officers from small, medium and large UK businesses. We use it to monitor developments in the economy and to track businesses’ views.
Published on 01 February 2024

The January DMP survey was conducted between 5 and 19 January and received 2,352 responses.

Firms reported that their output prices rose by an average annual rate of 5.6% in the three months to January, falling from 5.9% in the three months to December. Note that the DMP covers own prices from firms across the whole economy, not just consumer-facing firms.

Looking ahead, businesses expect their output price inflation to decline over the next year. Year-ahead own-price inflation was expected to be 4.3% in the three months to January, down 0.1 percentage points from the three months to December. Output price inflation is, therefore, expected to decline by 1.3 percentage points over the next 12 months based on three-month averages.

One-year ahead CPI inflation expectations declined further to 3.4% in January, down from 4% in December. The three-month average fell by 0.4 percentage points to 3.9% in January. Three-year ahead CPI inflation expectations also fell to 2.9% in the three months to January, 0.2 percentage points lower than reported in the three months to December. 

Firms reported annual employment growth of 2.4% in the three months to January, lower than the 2.8% reported in the three months to December. However, expected year-ahead employment growth strengthened to 1.7%, 0.2 percentage points higher than in the three months to December. The DMP provides one crosscheck on employment growth while the Labour Force Survey remains temporarily suspended. 

Expected year-ahead wage growth remained unchanged at 5.2% on a three-month moving average basis, and remained lower than realised annual wage growth, which stood at 6.8% for the three months to January.

Since November, the DMP survey has also included questions on how the rise in interest rates on existing borrowing (both bank and market-based) and on new borrowing were impacting firms’ sales, capital expenditures and employment. On average, firms reported that sales in the third quarter of 2023 were 3.8% lower as a result of interest rate increases, while capital expenditures were 7.9% lower and employment was 1.8% lower. By Q3 2024 firms expected sales to be 3.4% lower than they would have been in the absence of interest rate increases, while capital expenditures are expected to be 8.2% lower and employment 1.6% lower. Meanwhile, firms’ expectations for the interest rate they would be paying on their borrowing a year ahead remained unchanged at 6.2% in January.

The DMP was set up in August 2016 by the Bank of England together with academics from Stanford University and the University of Nottingham. It was designed to be representative of the population of UK businesses. All results are weighted. See Bloom et al (2017) for more details.

The DMP receives funding from the Economic and Social Research Council.