A cost assault is forcing businesses to hike prices to protect margins in a sign the UK cost of living crisis is set to get worse before it gets better, reveals a new study published today.
Around three in four firms are raising prices to weather soaring energy and staffing costs in what is being dubbed a “cost of doing crisis” by the British Chambers of Commerce (BCC), a business group that compiled the figures.
The BCC found that 73 per cent of companies are hiking prices, indicating experts’ bets on inflation reaching its highest level in recent history this spring seem a certainty.
The Bank of England expects the cost of living to top seven per cent this April, led higher by the 54 per cent energy bill price cap uplift taking effect that month.
A combination of the energy price cap rise, red hot price rises and a 1.25 percentage point national insurance will erode Brits’ living at the fastest rate since comparable records began in 1990, according to the Bank’s latest forecasts.
A sharp erosion of spending power has ignited a flurry of economists to downgrade their forecasts for UK economic growth year due to an expected pull back in consumer spending.
“The surging cost pressures produced by the cost-of-doing-business crisis will continue to lead to increased prices and fuel the cost-of-living crisis currently being faced by people across the country,” Shevaun Haviland, director general of the BCC warned.
The BCC’s research illustrates the “extreme pressure” businesses are under “from spiralling gas and electricity bills as well as increased wages,” Haviland added.