UK firms are plagued by record cost inflation, as rapid growth cools slightly

Wednesday, June 23, 2021

There were record high inflation pressures affecting British companies this month and growth in the private sector cooled only marginally from its all-time high in May when restrictions on coronavirus came into effect, a survey showed on Wednesday.

Preliminary IHS Markit/CIPS UK Composite Purchasing Managers Index (PMI) showed one of the largest monthly gains in business activity since 1998, showing a reading of 61.7, not close to the all time high of 62.9 in May.

Rising demand and supply chain disruption have pushed input cost inflation to its fifth consecutive month of accelerating gains, and pushed it to its highest since records began, the latest report said.

Inflation facing consumers may now be much higher after the Bank of England cut its 2 per cent target last month, said Chris Williamson, chief economist at IHS Markit which compiled the PMI survey.