06-07-2007
Inflation pushes up selling prices for larger businesses
New research from Grant Thornton, the business and financial advisors, has revealed that 35% of medium to large sized businesses are expecting higher selling prices for the remainder of the year.
This reflects the increasing rate of inflation in the UK and an increase in business confidence. 64% of companies interviewed expected a rise in their turnover over the next year and 57% anticipated an increase in profit. These figures are up on last year by around 10%.
The export industry seems to be the only sector lacking in confidence. The UK export business has fallen to the bottom of the same survey’s export league. Only 37% of companies are exporting goods, down on last year, compared with 67% of Italian companies and 54% of Polish businesses.
Alysoun Stewart of Grant Thornton’s strategic services group, said: “These results paint a very mixed picture for the UK. On the one hand businesses are extremely positive about their turnover and profitability, with results well ahead of the EU average, but on the other hand exports have decreased and investment in buildings, plants and new machinery is declining.”
According to Stewart the rise in selling prices is also worrying. “The increasing threat of inflation will need to be controlled carefully by a targeted monetary policy.”
The Bank of England is likely to take these results as support of their concerns over inflationary pressures, as businesses seem to feel more confident about passing on cost increases to customers.