Wage growth expectations slow but can't offset energy inflation shock; Bank of England's hope for a March rate cut has been dashed.

Golden Ten Data reported on March 5 that, prior to the outbreak of the Persian Gulf conflict, inflation and wage expectations among UK businesses were gradually aligning with the Bank of England's targets. However, according to the central bank's regular survey of chief financial officers, these indicators remain at unsettlingly high levels. The "Decision Maker Panel" survey released on Thursday found that surveyed companies maintained their wage growth expectations for the coming year at 3.6%. Nevertheless, this figure is expected to drop next month to the lowest level since the survey began in July 2022. Based on the three-month average expectations up to February, the latest reading shows wage growth will slow significantly from the actual 4.3% increase over the past year. The expected values for January and February were both 3.5%. Despite this, the figure still exceeds the Bank of England's estimated value of 3.25%, which is considered consistent with the 2% inflation target. Recruitment plans have slightly improved but have hovered near zero growth for months. Economist Rob Wood stated: "Overall, we see almost no basis to support multiple rate cuts by the Monetary Policy Committee this year. We expect the next rate reduction to occur in April, but we maintain our forecast of only one rate cut this year."