“With February’s rate of cost inflation the second-highest on record, wage rises, energy costs and continuing raw materials shortages took a sizeable chunk out of business profits.”
Inflation has continued to prove a major problem for businesses with increasing signs of companies passing on price rises to consumers, as confirmed by a number of major firms in recent weeks including Unilever and Nestle.
According to today’s figures costs for businesses were found to be rising at their second-highest rate since the index began in 1998.
Chris Williamson, Chief Business Economist at IHS Markit, warned that while the figures indicated a “resurgent economy” the growing cost pressures made the chance of a third interest rate hike from the Bank of England in March “look increasingly inevitable.”
Thomas Pugh, an economist at consultancy RSM UK, commented: “The Monetary Policy Committee (MPC) has made it clear that it is more focused on the threat from inflation than the risks to economic growth.