British companies signal largest price hikes since 2024
A Bank of England survey shows UK firms expect to raise prices by 3.7 percent over the next year. This jump follows rising energy costs linked to the Iran war.
Businesses in the United Kingdom are preparing to accelerate price increases over the coming year as energy costs climb following the outbreak of conflict in Iran, according to a new survey from the Bank of England. The monthly Decision Maker Panel revealed that firms surveyed in March anticipate raising their prices by 3.7% over the next 12 months. This figure marks the highest level since October and a notable jump from the 3.4% recorded in February, prior to the start of regional hostilities. This shift represents the most significant month-to-month increase in pricing expectations since April 2024. While price expectations rose, the outlook for wage growth showed signs of cooling. Firms reported that expected year-ahead wage growth dropped to 3.5% on a three-month moving-average basis and 3.4% on a monthly basis. Both metrics represent the lowest levels since the data series began in 2022, suggesting that labor cost pressures may be easing even as energy costs spike. Bank of England Governor Andrew Bailey addressed the situation in a recent interview, noting the challenges businesses face in the current economic climate. > Firms had limited pricing power to pass on cost increases to their customers although some pass through of higher energy costs was likely.
