LONDON – Confidence amongst British companies has sunk to its lowest since March 2021 as corporations fear about fast-rising inflation, in line with a survey printed on Wednesday which additionally confirmed pay pressures stabilising after a latest rise.
Lloyds Financial institution mentioned its month-to-month enterprise barometer dropped to 16% in August from 25% in July, with corporations extra nervous about rising costs than financial slowdown.
“Enterprise confidence declined for a 3rd consecutive month as companies proceed to face financial challenges within the interval forward and as inflation considerations intensify,” Hann-Ju Ho, senior economist at Lloyds Financial institution Industrial Banking, mentioned.
Wage and worth pressures remained elevated however there have been some brighter factors as demand for workers held up and companies reported much less concern about staffing and the coronavirus pandemic, Ho mentioned.
Whereas 38% of companies anticipated to extend headcount within the yr forward, the proportion considering of elevating pay by no less than 3% fell barely to 26% from 28% in July.
The Financial institution of England is monitoring pay pressures intently because it considers how a lot additional it wants to boost rates of interest to snuff out the danger that the latest 40-year excessive in inflation will essentially alter the general public’s evaluation of the long-term path for costs.
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