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The number of UK firms expecting to increase prices in the next three months has fallen for the fifth quarter in a row, according to new research.
A survey of 5,000 firms showed that two in five predict price rises, down from just over half earlier this year.
The British Chambers of Commerce said its study showed that labour costs were the biggest driver of price rises.
Domestic sales, cashflow, turnover and profitability indicators were said to be stable but remain at a low level.
Activity in the service sector has increased, but manufacturing is lagging behind, said the BCC.
Head of Research David Bharier said: ‘The results continue to point to tough trading conditions for many firms as inflation, labour shortages, global trade barriers, and interest rate rises continue to bite.
‘Manufacturers have reported a particularly tough quarter, and it will be crucial over the coming months to see how this trend plays out.
‘Most firms continue to report no increase to their investment intentions. This is in part a reflection of broader uncertainty, with little clarity on major long-term projects and yet more trade barriers to come with the EU.
‘Easing inflation and a recovery to business confidence provide brighter spots, but these need to be reinforced with a clear plan from Government on long-term investment and direction from the Bank on the interest rate.’
source: PA
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