The authors of the study of Lloyds Bank and Ihs Markit found the reason for rising prices in the UK. Reports about it Bloomberg.
According to the results of a survey of 1.5 thousand companies conducted by Lloyds Bank and Ihs Markit, British’s economic forecasts became the worst since January. In the report of August 19, prepared by the South-Western manufacturing advisory service, it was shown that almost all 260 respondents reported interruptions in the supply chain due to lack of personnel and materials. They lead to an increase in prices, which is alarming from the Bank of England, whose representatives have previously stated that the Bank will have to tighten the monetary policy.
As the restrictive measures are weakened caused by the coronavirus pandemic, there was a regular increase in demand for goods that cannot be fully satisfied due to problems in the supply chain. Logistics problems contributed to the lack of personnel. Companies are forced to look for workers, which has become difficult, since the negative impact of Brexit affected the labor market. Many European migrants had to return home after the exit of Great Britain from the European Union (EU). “We see the first signs that problems in the supply chain begin to impede growth,” said the managing director of South West Manufacturing Advisory Service Nick Golding.
At the same time, the representative of Lloyds Bank stated that there was a strong increase in production costs in the country. According to the government report of August 18, raw materials prices rose by 9.9 percent in July. As a result, there is a strongest price jump over the past ten years.
Problems on the border that followed Brexit caused high transportation costs. They, along with the lack of personnel, strengthened the negative impact of the coronavirus pandemic, which has already reduced production facilities. “Many enterprises face growth restrictions due to continuing failures in supply chains and lack of labor,” said the head of the department of economics and market analysis of Lloyds Bank Commercial Banking Jaavon Lolay. He also noted that these problems are indicators of potentially wider inflationary pressure.
Previously because of the interruptions in the supply chain, the British pubs were on the verge of closure, since the delivery of beer was limited. Manufacturers do not have the opportunity to work in the usual mode.