Endemic supply chain breakdowns that are causing the UK economy to snarl up threaten to derail Britain’s recovery from the Covid-19 crisis.
The chief of the British Chambers of Commerce (BCC) has warned “The supply chain crisis, alongside wider labour shortages and spiralling price rises, is clearly starting to drag on our economic recovery from Covid-19.”
The warning comes as the BCC found nearly half of its members expect prices for accelerate in the coming months.
More British manufacturers intend to hike their prices than at any other point in the past three decades, according to the survey, adding to signs of growing inflationary pressure in the UK.
The net balance of factory firms expecting to hike their prices rose to 60 per cent in the latest quarterly, the BCC said, up from 57 per cent in the second quarter and the highest since the survey began in 1989.
Shevaun Haviland, director general of the BCC said: “Businesses are being battered by a deluge of up-front cost pressures, including huge increases in the prices of key raw materials and shipping, as well as now facing a rise in National Insurance Contributions.”
“At the same time, they are losing out on opportunities for growth due to the labour shortages, despite many already raising wages and offering training.”
Almost half of the BCC’s members are having to pay higher prices for inputs.
“The Prime Minister must take action now, with plans not plaudits, or businesses across the country, and our wider economic recovery could falter under the weight of these pressures,” Haviland added.