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More UK companies plan price rises but wage expectations cool, Lloyds says

Published 29/04/2024, 23:04
© Reuters. Low cloud and mist shroud the top of skyscrapers in the City of London financial district, Britain, February 2, 2024. REUTERS/Toby Melville/File Photo

LONDON (Reuters) - British companies increasingly plan to raise prices in the coming months, although expectations for pay rises cooled in April, a business survey showed on Tuesday in mixed news for the Bank of England as it monitors inflation pressure.

The monthly Lloyds (LON:LLOY) Bank Business Barometer showed a net 63% of companies expected to raise prices in the coming months, up from 60% in March and marking the highest reading since November.

The survey added to signs that price pressures faced by British companies persist despite the drop in the headline rate of inflation, which the BoE expects will fall below the 2% target in the coming months.

Still, companies grew increasingly confident about the economic outlook, with 57% of companies expressing more optimism, up from 56% a month ago.

"It's encouraging to see businesses are showing continued confidence in their own prospects and the wider economy," said Paul Gordon, managing director for relationship management at Lloyds Bank.

The survey showed the proportion of companies expecting wage increases of over 3% or over 4% or more shrank in April, likely reflecting the recent increase in Britain's minimum wage.

A survey from S&P Global last week showed the biggest jump in input costs faced by British companies for nearly a year, reflecting salary costs.

BoE officials have warned that current rates of wage growth - at around 6% according to the latest official data - are not compatible with its 2% inflation target.

© Reuters. Low cloud and mist shroud the top of skyscrapers in the City of London financial district, Britain, February 2, 2024. REUTERS/Toby Melville/File Photo

The Lloyds survey of 1,200 companies with annual sales of at least 250,000 pounds ($314,000) was conducted by market research company BVA BDRC.

($1 = 0.7969 pounds)

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