Manufacturers are increasing their prices at record levels in the face of escalating inflationary pressures which show little sign of abating, according to a new report.
A survey by Make UK and business advisory firm BDO showed that prices for the UK and exports increased for the fourth successive quarter.
The survey of almost 300 firms was held before the invasion of Ukraine and the substantial increases in energy and raw material costs, which are likely to have pushed price increases even higher, said the report.
Almost one in 10 respondents said increases in the cost of energy and raw materials were a threat to their business.
Make UK is urged the Chancellor to use his forthcoming Spring Statement to delay the planned increase in National Insurance and examine other ways to ease business costs and boost investment.
Stephen Phipson, chief executive at Make UK, said: “Companies are now facing eye watering increases in costs which are becoming a matter of survival for many.
“While some of the increases are driven globally, the Government cannot use this as a shield from the fact some are self-imposed and, added together, are now forming a perfect storm for companies.
“As a result, the most immediate priority for the Chancellor in the short-term must be to use his statement to do whatever it takes to support companies through this difficult period.
“The alternative is to leave many businesses facing a tipping point from which some will simply not recover.”
Richard Austin, head of manufacturing at BDO, said: “Supply shortages are severe, and we are seeing a worrying widening of the gap between supply and demand.
“Manufacturers on the whole are currently managing to meet demand, but this will be difficult to sustain.
“Costs are rising at a speed that they cannot respond quick enough to and, combined with supply chain disruptions which will sadly now be exacerbated by the invasion of Ukraine, manufacturers will be turning to the Chancellor for immediate action.”