Blogs/Other Writing

The conflict in the Middle East has pushed energy prices sharply higher, but the implications for UK inflation will depend on the scale and duration of the shock as well as its propagation through firms’ costs, prices, margins, and wages. This column uses new survey data from UK firms to provide early evidence on how business expectations are responding. Firms currently expect higher prices and lower margins to be the main margins of adjustment, especially among energy-intensive firms. Consistent with this, firms’ expectations for their own prices and costs have risen since the war began. Wage and employment impacts remain more muted but could evolve over time.

The Decision Maker Panel (DMP) is a large monthly online panel survey of UK businesses. It was established in 2016 and is run by the Bank of England in partnership with King’s College London and the University of Nottingham. It collects quantitative information from Chief Financial Officers about recent developments in business conditions, (the distribution of) expectations, and uncertainty. This paper provides an overview of the survey. It covers the survey methodology and evaluates the data quality. It shows how the survey is representative, that the data are of high quality and that they match official statistics well. Aggregated DMP data are published on a monthly and quarterly basis, and anonymised microdata are available to researchers via the Office for National Statistics’ Secure Research Service.