Latest News

UK finance chiefs fear supply chain drag for at least another year

0
Economy20 minutes ago (Oct 18, 2021 00:15)

© Reuters. FILE PHOTO: Amazon trailer trucks are seen at Cherbourg Harbour, France January 21, 2021. REUTERS/Gonzalo Fuentes/File Photo

By William Schomberg

LONDON (Reuters) – Supply chain problems that are dragging on the economy’s post-lockdown recovery will persist for at least a year, according to a survey of chief financial officers at top British companies published on Monday.

With the Bank of England trying to assess how long a recent jump in inflation is likely to last, more than half of the chief financial officers surveyed by accountants Deloitte believed consumer price inflation would still be above 2.5% in two years’ time.

In August, the BoE forecast inflation would be only slightly above 2% in two years’ time after hitting 4% in the coming months.

Since then Britain’s economy has been further beset by the kind of supply shortages affecting other economies around the world, plus a lack of staff which has been aggravated by the country’s post-Brexit immigration rules.

The BoE is now expected to raise interest rates for the first time since the start of the pandemic either later this year or early in 2022.

Deloitte said CFOs expected operating costs to rise by the most in the survey’s 14-year history over the next 12 months.

A record-high share of CFOs also plan to increase capital expenditure, welcome news for Prime Minister Boris Johnson who this month berated employers for favouring migrant labour over productivity-boosting investment.

Ian Stewart, Deloitte’s chief economist, said the increased investment plans were being driven by the impact on Britain’s economy from the pandemic and Brexit, as well as the transition to renewable energy.

The survey of 92 CFOs, 18 of them from FTSE 100 member companies and 32 from FTSE 250 companies, was conducted between Sept. 20 and Oct. 4.

Separately, the head of manufacturers’ body Make UK called on Prime Minister Boris Johnson’s government to stop treating business as “the enemy within” after tensions over Brexit.

“Currently there is a feeling within industry that the government is still fighting the last war and sees business as the enemy within,” Stephen Phipson, chief executive of Make UK, said. “Business has moved on and government must do too.”

Make UK urged finance minister Rishi Sunak to announce a new industrial strategy in his Oct. 27 budget including an extension of his two-year tax investment incentives and more measures to stimulate digital and green investment.

UK finance chiefs fear supply chain drag for at least another year

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.

Sunday Night Futures

Previous article

China Says It Can Contain Economic Risks: Evergrande Update

Next article

You may also like

Comments

Leave a reply

Your email address will not be published.

More in Latest News