Home HRConsumers Market Cost-of-living: Consumers set to see fresh price squeezes as more companies plan hikes

Cost-of-living: Consumers set to see fresh price squeezes as more companies plan hikes

by admin
Susannah Streeter

30 June 2022

  • 30% of businesses expect to increase the price of goods or services they sell in July.
  • 46% of business in accommodation and food services sector set to hike prices in July.
  • 42% of business cite higher energy prices as the main factor for considering price hikes.
  • 50% of businesses said prices of goods or services they buy had increased compared to April.

The ONS has published the latest snapshot on inflation pressures for businesses:

https://www.ons.gov.uk/businessindustryandtrade/business/businessservices/bulletins/businessinsightsandimpactontheukeconomy/30june2022

Susannah Streeter, senior investment and markets analyst, Hargreaves Lansdown:

‘’It seems the price rises consumers have had to swallow at the tills may only get more painful this summer. This latest snapshot from the ONS shows that almost a third of businesses are expected to increase the price of goods or services they sell in July. Already shoppers are showing signs of setting strict limits on spending and this warning that further price increases are on the way, will be another blow to their financial resilience. The urge to socialise may be strong, but it’s set to get even more expensive in many bars, restaurants and hotels. Accommodation and food services was the sector with the biggest proportion of businesses expecting to hike prices in July, with almost half of firms set to pass on higher costs to their customers. Companies are really struggling with higher input prices, and rising gas and electricity bills in particular are becoming so onerous, bosses can no longer keep absorbing them. Consumers are having to make big choices about budgeting and the hospitality industry is bracing for a decline in spending as the cost-of-living crisis intensifies. A quarter of firms in the accommodation and food services activity expect turnover to decrease in July. With painful price rises knocking consumer confidence, the economy is already set to contract in the second quarter of the year and stay fragile in the months to come. At some point this weakening demand should help bring down inflation, but it’s going to be an arduous adjustment for companies and consumers.’’

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