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Britain heading for sharp increase in inflation

UK facing a sharp increase in inflation

A key business survey reveals British companies in the services sector are grappling with their biggest rise in costs for almost six years.

The report by the Markit/CIPS UK Services into the British economy’s biggest sector- including banks, hottest and hairdressers- also showed that the firms suffered their first slowdown for four months in January.

Living costs have started to rise at a faster pace in recent months on the back of rising energy prices and the pound’s weakness.Inflation hit its highest level for more than two years in December at 1.6%, and some forecasters see it going above 3% this year.

 

Experts warn that Britain is heading for a sharp increase in inflation. This suggests the country's economy lost momentum at the start of 2017.

Companies reported higher fuel and labor costs and said they had to pay more for imports because of the pound’s sharp fall since the referendum on the UK's membership in the EU held last year. 

According to the report, there were also further signs that companies were passing on some of that cost burden to customers at higher prices.

Media reports say living costs have started to rise at a faster pace in recent months on the back of rising energy prices and the pound’s weakness. Meanwhile, inflation hit its highest level for more than two years in December at 1.6%, and some forecasters see it going above 3% this year.

 


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