The proportion of businesses expecting to increase their prices fell to its lowest in at least three months, according to a survey of businesses that adds to signs price pressures are cooling from recent highs.
The Office for National Statistics (ONS) said 26% of companies surveyed over the past two weeks intended to raise prices in August. This was down from 31% in April, when the question about price changes for the following month was first asked.
The proportion of businesses reporting that they had raised their prices over the last month fell to 20%, down from 24% in March, the ONS said.
Other gauges of inflation expectations among businesses and consumers have also eased back recently after hitting multi-year highs — good news for the Bank of England (BoE) as it watches for signs that the recent jump in inflation is becoming embedded in the economy.
The BoE is also watching for signs that the economy might enter a more severe slowdown than feared, with chief economist Huw Pill last week warning that little to no economic growth was likely over the next year.
A BoE survey of lenders published on Thursday showed lenders expect the biggest fall in demand for mortgages since mid-2020, in a further sign that the housing market is cooling in the face of surging inflation.