The Confederation of British Industry reports that firms’ expectations for selling price inflation reached their highest level since February 2023 in May.
The checkout queue at a Canterbury supermarket tells only part of the story. Behind the scenes, businesses across the UK are signalling fresh concerns about pricing pressures ahead.
The Latest Survey Results
The Confederation of British Industry announced that expectations for selling price inflation picked up in May for the second consecutive month. The business lobby group’s latest survey found these expectations now stand at their highest point since February 2023.
This measure reflects what firms expect to charge for their goods and services in the coming months. It’s not the same as the official Consumer Prices Index inflation rate published by the Office for National Statistics, but it can signal where prices might be heading.
February 2023 marked a period when UK inflation was running well above the Bank of England’s 2% target. The fact that business pricing expectations have returned to those levels suggests companies are preparing for another wave of cost pressures.
Why These Numbers Matter
The CBI regularly publishes monthly business surveys covering manufacturing, services, retail and distribution sectors. Their measures of expected selling prices serve as a forward-looking indicator of potential price pressures across the UK economy.
Economists widely use these surveys to gauge pricing intentions, hiring plans and trading conditions throughout the private sector. When businesses expect to raise their prices, it often reflects higher costs they’re facing – whether from wages, materials, energy or other inputs.
But expectations don’t always translate directly into reality. Survey-based indicators can overstate or understate actual price changes that households eventually experience in shops and services.
The Policy Context
The Bank of England uses its inflation-targeting framework to keep consumer price rises around 2% annually. Official UK inflation is measured through the Consumer Prices Index, which the ONS publishes monthly.
These business expectations feed into the broader economic picture that policymakers monitor. Rising pricing pressures could influence future decisions about interest rates and monetary policy.
Source: @CBItweets
Key Takeaways
- Business expectations for selling price inflation hit a 15-month high in May 2024
- This represents the second consecutive monthly increase in pricing pressures
- The measure reflects what firms plan to charge, not official consumer inflation rates
What This Means for Kent Residents
Kent households should prepare for potential price increases across local shops, services and businesses in the coming months as these expectations filter through the economy. Businesses in the county’s key sectors – from logistics around Dover to hospitality in Canterbury and manufacturing across Medway – may face pressure to pass higher costs onto customers. While these are expectations rather than confirmed price rises, residents can protect themselves by comparing prices more carefully, considering bulk purchases for non-perishables where storage allows, and keeping track of household budgets to identify where increases hit hardest.