Record numbers of UK manufacturers raise prices as Ukraine war hits costs

Record numbers of UK manufacturers are raising prices as the war in Ukraine gives an added twist to inflationary pressures, the latest snapshot of industry has shown.

The employers’ lobby group, the CBI, said 82% of firms were expecting to raise prices in the coming months against just 2% predicting a fall.

The balance of 80% in March was up from 77% and the highest since the CBI began asking the question in its industrial trends survey in 1975 – a previous period in which soaring energy costs prompted a surge in the annual inflation rate.

Cost pressures have been building on manufacturers for the past year, with the March 2022 balance of 80% up from 20% a year ago.

News of the increase in the strains on industry came before Wednesday’s release of the official inflation figures from the Office for National Statistics and the spring statement on the economy from the chancellor, Rishi Sunak.

The CBI called on Sunak to take the opportunity to help energy-intensive companies and consumers struggling with cost of living pressures. Annual inflation stood at 5.5% in January but is expected to be close to 6% in February and to rise further to about 8% in April.

The CBI said cost and price pressures were coming at a time when industry’s order books – both for domestic and overseas customers – were strong. Total order books matched the record level seen last November, while export order books were reported to be above normal to the greatest extent in three years.

Anna Leach, the CBI deputy chief economist, said: “This survey highlights strong order books and output growth, but the cost pressures facing manufacturers have been amplified by the conflict in Ukraine.