U.K. Businesses Expect More Price Rises Ahead
ByU.K. businesses are warning that more price increases are ahead, according to a survey by the British Chambers of Commerce.
The proportion of services firms expecting to raise prices in the next three months climbed to the highest since 2008 last quarter, the lobby group said in a report Wednesday -- a percentage balance of 36 percent. Among manufacturers, that figure rose to 50 percent, from 35 percent previously.
U.K. inflation accelerated to the fastest in more than five years in November, fueled by the pound’s slide since Britain’s vote to leave the European Union.
“While inflation is likely to peak in the coming months it is likely to remain stubbornly above the Bank of England’s 2 percent inflation target for a prolonged period,” said Suren Thiru, head of economics at the BCC. “The U.K. economy is set to continue on an underwhelming growth trajectory over the near term with uncertainty over the impact of Brexit coupled with high inflation and weak productivity.”
Businesses also said that skills shortages are reaching “critical levels,” the BCC found, with 71 percent of service sector firms attempting to hire reporting recruitment difficulties, the most since records began.