Inflation: A quarter of UK firms expecting to raise prices

·Finance Reporter, Yahoo Finance UK
·2 min read
UK firms A staff member works at PALLITE, a designer and manufacturer of social distancing screens and desks from recyclable paper board, amid the outbreak of the coronavirus disease (COVID-19), in Wellingborough, Britain, July 20, 2020. REUTERS/Andrew Boyers
Inflation: Energy prices remained the most commonly reported reason for UK firms to raise prices. Photo: Andrew Boyers/Reuters

One in every four firms in the UK are planning to raise prices further, according to the latest real-time data from the Office for National Statistics (ONS).

Over a quarter of businesses surveyed by the ONS expect to increase the cost of their goods or services in August. Still, the figure is down from 31% estimated for April.

Energy prices are still a particular concern for UK industry, with 37% of companies which are raising prices saying rising cost of energy is the predominant reason for them doing so.

There is mounting concern over soaring energy costs, with annual bills expected to climb above £3,000 when the price cap is increased in October.

It comes as half of firms reported that they purchased more expensive goods and services over the month.

Read more: Inflation surges 9.1% in June, most since November 1981

The number saying of companies saying their costs were increasing was “broadly stable” against May’s data.

However, there were signs of improvement in June as 20% of companies reported an increase in the price of goods and services they sold, dipping from 24% in the previous month.

Read more: 'We will see some relief' from inflation pressures, says economist

UK inflation increased to 9.1% in May amid surging energy prices and is expected to have risen further in June when the latest readings are confirmed later this month.

Almost a quarter of UK firms have revealed a slump in trade over the past month as cost-of-living pressures continue to bite.

Around 24% of companies said their turnover dropped in June compared with May.

Only 13% reported that their turnover had increased, while 54% reported that their turnover stayed the same.

Watch: How does inflation affect interest rates?

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