UK Businesses Report Record Cost Increases Amid Inflation Concerns

On April 23, PMI survey results indicated that a growing number of UK businesses are reporting rising costs, marking a historic increase. According to Jin10, this trend suggests higher inflation in the future as the impact of the Iran war spreads across the economy. The composite PMI input price index saw its largest increase in 28 years, reaching its highest level since double-digit inflation emerged at the end of 2022. This survey may heighten concerns for the Bank of England that significant energy price hikes could lead to broader inflation expectations. However, the extent to which deteriorating labor market conditions can mitigate these effects remains a critical question.