Skip to main content

Factory-Gate inflation

  A survey has revealed that a record number of manufacturers are raising prices, with factory-gate inflation of up to 10 per cent becoming “built-in” to customers’ expectations. 

“While manufacturers will be able to enjoy some festive cheer this year, their spirits will be tempered by the eye-watering impact of escalating cost pressures,” James Brougham, senior economist at Make UK, said. 

A balance of 52 per cent of firms said they were increasing prices in the fourth quarter, up from 50 per cent in the third. However, customers have accepted the higher costs “without a response”, suggesting that inflation is “becoming built-in”. 

Price increases of 10 per cent have become a “regular occurrence”, it said.

To underline how “sharply inflation has bitten”, it said the balance of firms raising prices stood at just 4 per cent in the fourth quarter of 2019, before Britain left the European Union. 

Price increases of 10 per cent have become a “regular occurrence”, it said. 

Make UK said that the manufacturing sector continues to achieve growth but warned it had seen “some evidence of slowing activity”. 

Manufacturers are responding to intense inflationary pressures that show “little if any, a sign of abating”, it found. 

Despite the leap in inflation, the Bank is expected to keep interest rates at their historic low of 0.1 per cent as policymakers may need more time to assess the impact of the Omicron variant on public health and the economy. Although there is little sign that inflationary pressure will start to ease soon, their prospects remain relatively rosy as demand from large export markets “looks reasonably strong”, he added. 

According to the survey by the trade body Make UK, companies have increased their prices for a fourth-quarter in a row, and buyers must brace themselves for further rises in the first three months of next year. 

The current reading is the highest since 2000 when Make UK began monitoring inflation expectations. 

Summarised www.sba.tax
Labels:

Comments

Post a Comment

Cloud Bookkeeping

HS2 cost cuts new routes and add delays.

 Trans­port depart­ment offi­cials have begun work on «Project Sil­ver­light» sug­gest­ing the high­speed rail scheme might face four addi­tional years of delay. The planned High Speed 2 rail line faces fur­ther delays of up to four years and more cuts to the project under plans being drawn up by min­is­ters to rein in its bal­loon­ing costs. The extra delays to the coun­try’s biggest infra­struc­ture project would mean that it would not be com­pleted until as late as 2045 — 12 years after ori­gin­ally planned. «This is a func­tion of infla­tion; we are hav­ing to find huge sav­ings because the cost of everything the depart­ment is already doing will have become so much more expens­ive by then,» said one gov­ern­ment offi­cial. In Octo­ber, the FT repor­ted that the Treas­ury had asked HS2’s man­age­ment team to identify poten­tial cuts or «scope reduc­tions» to the high-speed line. Trans­port depart­ment offi­cials have sub­sequently begun work on Project Sil­ver­light aimed at fi...
4 comments
Read more

Doubt on CS's collateral.

  Credit Suisse provided an emergency $140mn loan to Greensill Capital based partly on invoices to companies that deny ever doing the business stated on the documents. The Swiss bank provided the loan in October 2020, less than five months before the collapse of Greensill, a supply chain finance firm that counted former British prime minister David Cameron as a senior adviser. Invoices issued by metals magnate Sanjeev Gupta’s Liberty Commodities and sold to Greensill formed part of the collateral for the loan, according to documents seen by the Financial Times and people familiar with the transaction. Yet several of the parties named on the invoices have told the FT they did no business with Liberty. GFG has consistently denied any wrongdoing. Credit Suisse’s loan had a clause dictating that the collateral value had to be equal to or greater than the $140mn borrowed. The terms of the debt agreement only allowed invoices on Green-sill’s balance sheet to count towards this tally if t...
2 comments
Read more

Tax cut

  Sterling tumbled against the dollar to below $1 . 09 ,  hitting its lowest point since 1985 ,  after UK chancellor Kwasi Kwarteng unveiled a £45bn debt-financed tax-cutting package that sparked a historic increase in borrowing costs .  Kwarteng’s political and economic gamble includes the biggest set of tax cuts for 50 years ,  with the end of the 45p additional rate for the highest earners as well as a sharp reduction in levies on dividends .  But concern over the amount of debt required to finance the tax cuts triggered a frenetic day of trading that raised doubts on whether Britain’s new economic approach was sustainable .  «Britain will be remembered for having pursued the worst macroeconomic policies of any major country in a long time» . Kwarteng has staked the political fortunes of the Conservative party on the bet that the radical tax cuts and deregulation will raise Britain’s sluggish growth rate to 2 . 5 per cent .  «This is a new appr...
Post a Comment
Read more