Fears about inflation are hitting record levels among UK businesses, with more than half of respondents in one of the largest independent surveys of sentiment and a leading indicator of economic growth citing price rises as an “increased cause of concern”.
“Persistent weakness in several indicators highlights concerns over the strength of the recovery,” said the quarterly economic survey from the British Chambers of Commerce, published on Wednesday.
Over half, or 52 per cent, of the more than 5,700 businesses surveyed cited inflation as an “increased” worry in the third quarter, up from 40 per cent in the three months before, while inflation expectations hit record highs as 62 per cent of manufacturers predict their prices will rise in the next three months.
The BCC survey showed that 47 per cent of businesses reported increased domestic sales, up from 44 per cent in the second quarter.
In manufacturing, 60 per cent of businesses expect to increase their prices, the highest level in the history of the quarterly economic survey, which began in 1989.
“Our latest data indicates a disappointingly modest uptick in economic activity in the third quarter as the boost from the end of restrictions was increasingly stymied by supply and staff shortages and rising cost pressures,” said Suren Thiru, BCC’s head of economics.
“Though the UK economy remains on track for moderate growth,” he added, “a spell of stagflation may be inevitable.”