UK firms expect to raise prices 6% in 12 months

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Price-increase expectations eased only slightly from 6.2% in October. The average for the three months through November was 6.2%, down from 6.4% the previous month…reports Asian Lite News

Inflation pressures in the UK economy showed only limited signs of abating in November, with companies expecting to raise prices by 5.7% in the coming 12 months.

Chief financial officers surveyed for the Bank of England also said they expect consumer prices to be growing at an annual rate of 7.2% a year from now and 3.9% in three years, almost double the 2% target.

The Decision Maker Panel data published Thursday point to further BOE rate increases in the coming months as the central bank battles to prevent the highest inflation in four decades from becoming entrenched. The current inflation rate is 11.1%, reported Bloomberg.

As series of policy makers have pointed to the risk in recent days. On Wednesday, BOE Chief Economist Huw Pill cited corporate pricing power along with the strength of wage growth as reasons for vigilance.

Price-increase expectations eased only slightly from 6.2% in October. The average for the three months through November was 6.2%, down from 6.4% the previous month.

The BOE has raised interest rates eight times over the past year to 3% in an effort to avert a wage-price spiral. Money markets expect the cost of the borrowing to hit 4.7% by the summer of 2023, close to levels prevailing before the 2008 financial crisis.

A business confidence survey by Lloyds Bank Plc earlier this week said that 60% of UK companies are targeting higher prices, with manufacturing and importing firms most likely raise the cost of their products.

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