(April 4): UK companies expect to raise their own prices by the least in almost two and a half years, a further sign that an unwinding of inflationary pressures is gathering momentum.

A Bank of England (BOE) survey of chief financial officers found that businesses expected to increase prices over the next year by 4.1% in the three months to March, down from 4.3% the last time the poll was done a month ago.

It was the lowest reading since October 2021 before the energy price shock, and economists had expected a smaller fall to 4.2%.

Signs that price and wage expectations are starting to cool faster are likely to give BOE policymakers more confidence that they can begin to cut interest rates during the summer.

The decision-maker panel found that firms’ expectations for year-ahead wage growth also dropped to 4.9% in the three months to March, the first easing in the measure since August last year. Year-ahead inflation expectations eased to 3.2% in the single month of March, down from 3.3%.