Bank of England Surveys Suggest Energy Shock Isn’t Fueling Wages

UK firms are planning their largest price hikes in over two years but the energy price shock from the Iran war has yet to stir wage demands as anxiety mounts among consumers and businesses, Bank of England surveys showed.

In April, firms told the BOE’s Decision Maker Panel survey they expect to raise prices by 4.4% over the next year, up from the 3.7% planned in March. The jump reflects a surge in energy costs as conflict in the Middle East continues to roil global markets and disrupt vital oil supplies. Businesses also predict overall inflation will reach 4% - double the BOE’s target.