Surging prices hurting firms, warns Lloyds

UK businesses are raising prices at their fastest rate this century, challenging the country’s competitiveness, Lloyds Bank said.

It tracks 14 sectors and said all had increased their charges last month.

Many firms were merely passing along the cost of providing their goods to customers, the bank said.

Inflation hit 2.1 per cent in May, which was a steep rise and ahead of expectations.

But Jeavon Lolay, of Lloyds Bank, downplayed fears of runaway prices.

He said: “It’s arguably still too soon to worry about inflation spiralling out of control.”

There are also early signs that costs might soon come back in line. Disruption in supply chains – which drives up prices for businesses that they often pass on to customers – reduced in May.

All 14 sectors are creating new jobs, with tourism and recreation businesses hiring for the first time since January 2020.

The reopening of the economy and the pent-up demand have led to staffing shortages, Lloyds said.

But the delay to “freedom day”, originally scheduled for today, might reduce hiring pressure.

The manufacturing sector reported the strongest rate of job creation. Mr Lolay said: “The economy is now on a much sounder footing.”