BCC Quarterly Economic Survey: Signs Inflation Pressure Easing
- Less than half (45%) of UK firms expect their prices to increase in the next three months, down from 55% in Q1.
- Labour costs are the biggest driver of price rises, cited by 68% of businesses.
- Domestic sales, cashflow, turnover and profitability indicators all remain largely unchanged from Q1.
But the data also reveals that the main factor for increasing costs is now coming from wages rather than utility bills or raw materials.
The survey, by the BCC’s Insights Unit, of over 5,000 firms – 92% of whom are SMEs – also reveals business performance across different sectors varies considerably, with hospitality and retail firms suffering more widely from cashflow difficulties.
The research took place between 15 May and 9 June and before the Bank of England increased the base rate to 5%. Respondents were split into 27% manufacturing and 73% services industries, with 47% exporting.
Growth in business activity remains weak, with no significant improvement to sales and cashflow data.
The percentage of firms reporting increased domestic sales remained largely static, with 35% reporting a rise (broadly unchanged from 34% last quarter). Meanwhile 24% reported a decrease and 41% reported no change.
Source: British Chambers of Commerce.