Bank of England's Monetary Policy Committee Split
The Bank of England's Monetary Policy Committee has been divided for several months on how much interest rates need to rise to return double-digit inflation to its 2% target and how persistent underlying inflation pressures will be.
February Expectations for Price Increases
According to the survey, businesses expected to raise their prices by 5.4% over the coming year, down from 5.8% in January, and the smallest planned increase since February 2022, when Russia's invasion of Ukraine caused a surge in energy costs.
Planned Wage Increases Remain the Same
The businesses surveyed in February plan to raise wages by 5.7% over the next year, the same as in January. This measure was last lower in August.
Inflation Downward Path Evidence
For some policymakers, the survey results may be evidence that inflation is now firmly on a downward path and will accelerate as the effect of past interest rate rises spreads through the economy.
Still Twice the Average Before COVID-19 Pandemic
However, the planned wage and price increase scale is still around twice their average before the COVID-19 pandemic, when inflation was near its 2% target.
Consumer Price Inflation Expectations
Businesses said they expected consumer price inflation to fall to 5.9% in one year and to be 3.4% in three years, in contrast to the Bank of England's forecast last month that inflation would be below its 2% target by the second half of next year.

BoE Governor Andrew Bailey's Statement
BoE Governor Andrew Bailey stated in a speech that it is uncertain whether the central bank will need to raise interest rates further and will depend on policymakers' wage and price pressures assessment.
Financial Market Expectations
Financial markets expect the Bank of England to raise interest rates to 4.25% from 4% later this month and for rates to peak at 4.75% in the year's second half.
Survey Methodology
The Bank of England's monthly Decision Maker Panel survey was based on responses from 2,462 chief financial officers between February 3 and February 17.