Rise in inflation dials up price pressure for businesses

Firms face increased pressure to increase prices with inflation having climbed more than expected to 3.5%, East Midlands Chamber has said.

The warning followed release of the latest estimated figure from the Office for National Statistics, which is above the government’s 2% target.

East Midlands Chamber Director of Policy and Insight Richard Blackmore said: “Half the businesses in the East Midlands said they expect to up their prices in our last Quarterly Economic Survey for the region and with inflation a driver of that, seeing it soar much further away from the government’s 2% target to 3.5% piles extra weight onto that challenge.  

“Firms are already dealing with the burden of higher National Insurance contributions and higher National Living Wage and the impact of those was strong enough that our survey revealed labour costs cited as the biggest factor behind businesses considering upping prices.

“Political leaders need to step up and ensure policies ease these very tough trading conditions. All eyes will be on the government’s comprehensive spending review on 11 June where they must seize every opportunity to help not hinder businesses.”