The British Chamber of Commerce (BCC) said its latest survey indicates 62% of businesses expect their prices will rise in the next three months.
The reading for the first quarter of 2022 is a new high and up from 58% in the final quarter of 2021. A mere 1% of survey respondents expect a decrease in their prices.
The BCC said 77% of survey respondents cited inflationary pressure as their main concern, up from 66% in the preceding quarter.
Rising raw materials prices were cited by 92% of respondents as a cause of pressure on margins, while 56% pointed to increased overheads, 34% highlighted pay settlements and 19% finance costs.
“High price pressures suggest that the current inflationary surge will escalate significantly in the coming months. The reversal of the hospitality VAT cut, the higher energy price cap and soaring energy and commodity prices amid Russia’s invasion of Ukraine, should lift inflation well above 8% in the near term,” said Suren Thiru, the head of economics at the BCC.
The threat of rising interest rates is also gaining prominence, with 32% of respondents registering it as an area of concern, up from 27% in the preceding quarter.
As is often the case in times of economic uncertainty, the willingness to invest in plant, machinery and equipment is not strong; 58% of businesses said they would be keeping investment plans about the same while 27% intend to increase it and 15% to cut back.