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Many UK services businesses plan record price rises – CBI

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© Reuters. FILE PHOTO: A staff member serves customers Jordan Blumire and Rosie Blumire at Loxleys Restaurant & Wine Bar, as coronavirus disease (COVID-19) restrictions continue to ease, in Stratford Upon Avon, Britain, May 17, 2021. REUTERS/Andrew Boyers

LONDON (Reuters) – A record share of firms in Britain’s business and professional services sector expect to raise prices over the next three months as they face surging cost pressures, a survey showed on Thursday, adding to the Bank of England’s inflation challenge.

The Confederation of British Industry said business and professional services firms were more likely to raise prices than at any time since the survey began in 1998. Consumer services companies’ pricing plans were the highest since 2007.

“Rising inflation and cost pressures are hitting firms’ profitability and their bottom line. The spectre of further price increases is being felt across the board,” said Charlotte Dendy, the CBI’s head of economic surveys.

The BoE has raised interest rates twice since December in a bid to stop an energy-led surge in inflation to a 30-year high from shifting businesses’ pricing behaviour upwards in the long term.

Financial markets expect the central bank to raise rates again this month and for interest rates to reach 1.5% by August, up from 0.5% now.

The quarterly CBI survey, conducted from Jan. 28 to Feb. 15, showed sales growth slowed over the previous three months, when many companies were hit by the Omicron wave of coronavirus.

However, hiring and investment intentions remain strong and the businesses forecast a pick-up in business volumes over the coming quarter.

Many UK services businesses plan record price rises – CBI

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