UK Businesses Cite Inflation as Top Concern Amid Economic Challenges

Recent reports indicate rising inflation expectations in the UK, prompting concerns among economic experts. Bank of England official Megan Greene noted that while expectations have increased, they remain anchored, yet warn that persistent inflation could lead to demands for higher wages and less resistance to price hikes. Meanwhile, UK shop prices fell at a slower rate in March, driven by retailers reducing prices to stimulate consumer spending, although food inflation is climbing. The Greater Manchester Chamber of Commerce's Economic Survey highlighted businesses' unease regarding inflation and rising costs, impacting recruitment and investment. Additionally, food inflation has stabilized but is projected to rise significantly due to new costs affecting retailers, including increased National Insurance contributions and wage rates. Overall, the economic landscape reflects both challenges and resilience as the UK navigates inflationary pressures.