“Sterling has fallen around 12% on a trade-weighted basis since last June’s referendum, and as a result producers are facing sharply higher input costs – up 20.5% on a year earlier, he said. “It’s almost unthinkable that cost increases of this magnitude can be fully absorbed, leaving firms with little choice but to pass at least some of the burden onto consumers,” he said. By the end of the year price inflation looks set to outstrip wage growth, which will squeeze household budgets in the short term.”
The CBI appears to be concerned as well, its chief economist Rain Newton-Smith saying its members are starting to feel the pinch.
“Inflation has continued to creep higher, and we expect it to rise even further over the year ahead. Companies are already feeling the impact of the lower pound, with input price inflation now well into double-digits. “It’s crucial that the Government doesn’t put any further pressure on firms in the upcoming Budget – top of our list is for the Government to tackle the UK’s outdated business rates system.”
