The British Chambers of Commerce (BCC) announced the publication of a new study showing that a growing number of firms expect prices to increase significantly in the coming months. The figures also document growing concern among businesses about rising inflation.
Data from the responses of more than 5,800 companies show that 2 out of 5 businesses (38%) expect to see price increases in the next three months in the first quarter of 2021. Those with this view were 25% in the previous quarter. In contrast, only 5% of firms expect a decline.
The figures also show that those who see rising inflation as a cause of concern in the coming months have increased from 1 in 4 (25%) in the previous quarter to 1 in 3 (30%) in this quarter.
The balance of manufacturing firms expecting the price of their goods to rise in the next three months (the percentage of firms reporting an increase minus a decrease) increased from 27% in the previous quarter to 46%. This indicates that the price increase expectation is currently the highest since the 4th quarter of 2017, when the devaluation of the pound sterling after the EU referendum pushed the UK consumer price inflation to 3%.
While some companies point out that the post-Brexit and Covid-19 cut continues, raw material costs are shown as the main driver of rising prices for manufacturers. 87% of the manufacturing and manufacturing sector and 72% of construction companies cited as the reason for this as the increase in raw material prices for the first quarter of 2021, which are 80% and 67% higher respectively than the previous quarter.
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