Price pressures add to business worries

EIGHT out of 10 manufacturers say that rising material costs are placing pressure on them to hike prices, the British Chambers of Commerce (BCC) announced today.

Positive balances of 40 per cent in the factory sector and 33 per cent of firms in the service sector want to raise prices, the BCC’s quarterly economic survey showed. The balances are the highest they have been since the autumn of 2008.

The survey suggests that the economy has returned to growth in the first three months of the year, yet is largely downbeat.

GDP growth for the quarter “is likely to have been only slightly larger than the decline of 0.5 per cent seen in quarter four of 2010,” the report said.

Confidence, particularly among manufacturers, has fallen since the previous quarter, the survey shows.

“Exporting activity remains strong, but there have been sharp declines in confidence,” said BCC chief David Frost. “The government must get the detail right on Budget measures to generate economic growth.”