UK Businesses Plan Price Hikes Amid Rising Energy Costs, Survey Shows

According to Jin10, a survey by the Bank of England reveals that UK businesses are planning significant price increases due to soaring energy costs triggered by Middle East conflicts. In March, surveyed companies indicated plans to raise prices by 3.7% over the next year, up from 3.4% the previous month, marking the highest level since October last year. Businesses also expect overall consumer prices to rise by 3.5%, compared to a 3% forecast in February. These figures suggest mounting inflationary pressures following energy price surges caused by US and Israeli strikes on Iran. Bank of England policymakers are weighing the risks of second-round effects against threats to economic growth and employment. Bank of England Governor Andrew Bailey stated in an interview on Wednesday that he believes businesses have limited ability to pass on higher costs. The survey also shows a 0.1 percentage point drop in wage expectations to 3.4%, the lowest since the Bank of England began collecting this data in 2022, while employment plans continue to deteriorate.