UK Firms Expect 3.7% Price Rises Due to Energy Costs

UK businesses are anticipating sharper price increases over the next year due to rising energy costs from the ongoing conflict in the Middle East, according to a Bank of England survey released Thursday.

The central bank's Decision Maker Panel, which polls more than 2,000 chief financial officers and executives, found that firms expect to raise prices by 3.7 percent over the coming 12 months. This marks an increase from 3.4 percent anticipated in February and the highest level since October. Over the three months to March, the expected price growth stood at 3.5 percent, up 0.1 percentage point from the prior period. Businesses also foresee overall consumer prices rising by 3.5 percent, compared with 3 percent expected the previous month.

The survey, conducted from March 6 to March 20, captured responses shortly after the United States and Israel initiated attacks on Iran, which led to the closure of the Strait of Hormuz, a critical route for global energy shipments. Officials at the Bank of England attributed the shift in expectations to recent surges in energy prices, noting that firms reported higher inflation in the year to March than in the year to February. Manufacturers...