Monthly Decision Maker Panel data - January 2025

The January DMP survey was conducted between 10 and 24 January and received 2,306 responses.

Firms reported that their output prices rose by an average annual rate of 3.8% in the three months to January, unchanged from the three months to December. Note that the DMP covers own prices from firms across the whole economy, not just consumer-facing firms.

Year-ahead own-price inflation was expected to be 3.9% in the three months to January, 0.1 percentage points higher than firms reported in the three months to December. Businesses therefore expect output price inflation to increase slightly over the next year, based on three-month averages.

Expectations for CPI inflation a year ahead rose from 2.8% to 3.0% in the three months to January. The corresponding measure for three-year ahead CPI inflation expectations was 2.8% in the three months to January, 0.1 percentage points higher than the three months to December. 

Firms reported that annual wage growth was 5.3% in the three months to January, 0.1 percentage points lower than in the three months to December. Expected year-ahead wage growth dropped by 0.1 percentage points to 3.9% on a three-month moving-average basis in January. Firms therefore expect their wage growth to decline by 1.4 percentage points over the next 12 months based on three-month averages.

Realised annual employment growth has slowed over the past year and was reported to be 0.4% in the three months to January. Expectations for employment growth have also declined over recent months.  In the three months to January, firms expected no growth in employment over the year ahead.  That represents a fall of 0.4 percentage points on the month and a reduction of 1.1 percentage points since the three months to October.

The DMP survey has continued to ask firms about how they expect to respond to the increase in employer National Insurance contributions that were announced in the Autumn Budget. Firms were allowed to select more than one option. On average over the November, December, and January surveys, 62% of firms expect to lower profit margins, 56% expect to raise prices, 53% expect lower employment and 38% expect to pay lower wages than they otherwise would have done.