UK firms are most concerned about rising costs of goods and services as inflation soars, as well as a shortage of workers, a new study has shown.
According to the Office for National Statistics (ONS), more than a quarter of companies (26%) reported input inflation as their main concern for July 2022, up from 21% in February.
Constriction firms were particularly anxious about input price inflation, with 48% citing this as a major concern, compared to 38% last month.
Those in the food and accommodation sector (47%) were worried about the jump in energy prices.
26% of businesses reported input price inflation (e.g. inflation of goods and services prices) as the main concern they had for July 2022.
Overall, the percentage for this concern continues to show a steady increase, up from 21% for late February 2022 https://t.co/pFYa7NfRGO pic.twitter.com/9UKk8EENdS
— Office for National Statistics (ONS) (@ONS) June 16, 2022
It comes as UK inflation rose to 9% in the year to April, its highest level since 1982, as UK households continue to face a sharp cost of living crisis. The biggest contribution came from soaring energy, fuel and food prices.
Grocery prices are set to reach a 20-year high of 15% this summer, according to the Institute of Grocery Distribution (IGD).
Food price inflation is set to accelerate in the coming months, driven by higher costs for items such as meat, cereals, dairy, fruit and vegetables.
The Bank of England is expected to lift interest rates from by a quarter point to a 13-year high of 1.25% on Thursday in a bid to tackle rampant inflation.
Other main concerns reported by businesses were supply chain disruption and competition, the ONS said in its economic activity and social change report on Thursday.
Meanwhile, 19% of trading businesses said they faced challenges obtaining materials, goods or services last month. The construction industry reported the largest proportion facing these challenges (33%).
Labour market shortages were another main concern.
In early June, 15% of businesses that haven't stopped trading reported that they were experiencing a shortage of workers, up from 13% reported in early May.
At 35%, the accommodation and food service activities industry reported the highest percentage worker shortages.
The biggest reported effects of these worker shortages were that, 44% of businesses were unable to meet demands, down from 50% in early May 2022, while 46% said employees had increased their hours.
It comes as separate figures from the ONS on Tuesday highlighted the difficulties faced by businesses in hiring staff.
The number of people on company payrolls increased to a fresh record high, up 90,000 in May to 29.6 million.
The number of job vacancies in March to May 2022 rose to a new record of 1.3 million. But there were 41,000 more people without work but looking for a job, the first increase since the three months to December.
The unemployment rate rose to 3.8% in the three months to April, as more people look for work. That’s up from 3.7% in the quarter to March, which was the lowest in 50 years.
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