A record share of firms in Britain’s business and professional services sector expect to raise prices over the next three months as they face surging cost pressures according to the Confederation of British Business.
That’s according to the latest CBI Service Sector Survey, based on responses from 140 services firms. The survey was conducted between 28 January and 15 February.
Last quarter, cost and average selling prices kept growing rapidly with strong growth expected to continue in the next three months, hitting some of the highest expectations on record for the sector as a whole, but particularly for business & professional services.
Though businesses remain optimistic about the general business situation, volumes growth eased in consumer services and stalled in business & professional services. This, alongside the rising costs and prices fed through to falling profitability across the service sector.
Charlotte Dendy, CBI Head of Economic Surveys, said:
“Rising inflation and cost pressures are hitting firms’ profitability and their bottom line. The spectre of further price increases is being felt across the board.
“Despite this, businesses are looking to invest and employ more workers as the economy stays open for business. But weaker volumes growth and falling profitability threatens businesses’ good intentions.
“The Chancellor must use his Spring Statement to set us on a path to higher economic growth, starting with a permanent Investment Deduction which could lift business investment by £40bn by 2026.”