Energy shockwave spreading: UK companies to raise prices by half-year high in the next year, inflation pressures rising again.

A survey by the Bank of England shows that, due to the surge in energy costs triggered by the conflict in the Middle East, British businesses plan to further increase prices. Businesses surveyed in March said they intend to raise prices by 3.7% in the coming year, higher than the expected 3.4% in February, reaching the highest level since October of last year. At the same time, businesses expect an overall consumer price increase of 3.5%, compared to the 3% expected in February. The Bank of England stated on Thursday that this increase "reflects businesses adjusting their expectations due to recent rises in energy prices." The survey was conducted from March 6 (a week after the US attacked Iran) to March 20, with a total of 2004 responses received. Data shows that with the key energy passage of the Strait of Hormuz remaining closed, countries around the world are facing impacts, and inflationary pressures in the UK are rising. Policymakers at the Bank of England are weighing the risks of chain reactions in prices and wages, as well as the threats facing economic growth and employment. Bank of England Governor Andrew Bailey said in an interview on Wednesday that he believes businesses have limited ability to pass on higher costs. Survey results from the decision-making group show that wage expectations for businesses have decreased by 0.1 percentage point to 3.4%, the lowest level since the Bank of England began collecting this data in 2022; meanwhile, employment plans for businesses have deteriorated further. About 57% of businesses stated that the overall uncertainty facing their business is at a "high" or "very high" level, an increase of 10 percentage points from February. Uncertainty about price expectations in the coming year has also increased.