Businesses say they’re about to pass on cost of sterling slide to consumers Further warnings about price rises for goods and services have emerged after a survey showed that squeezed sales margins caused […]

Further warnings about price rises for goods and services have emerged after a survey showed that squeezed sales margins caused by the falling pound will be passed on to the consumer.

The pound has lost a fifth of its value since the EU referendum, hitting margins on domestic sales at almost half the 1,500 businesses surveyed by the British Chambers of Commerce (BCC). Just over half of the respondents said they would have to increase the price of products and services, while two-thirds said they expect their costs to go up.

Pro-Brexit economists have said sterling’s squeeze will be good for exports as British products will cost less overseas. But only a quarter of the businesses surveyed by the BCC said they expected a positive impact, while the same proportion said they anticipated a negative outcome.

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Locked into contracts

Adam Marshall, director-general of the BCC, said the depreciation of sterling has been the biggest problem facing companies since the referendum.

Importers also have problems, including being locked into contracts with suppliers and unable to respond to currency fluctuations.

Dr Marshall called for the Chancellor to alleviate some of the upfront costs facing businesses in his Budget in March.

“Currency fluctuations aren’t something in the UK Government’s direct control, and they are likely to continue as the Brexit transition unfolds,” he said. “Ministers must do everything in their power, meantime, to help businesses keep costs down and stay competitive.”

Marmite-gate

Marmite-maker Unilever was heavily criticised by Tesco and other retailers when it increased prices by 10 per cent in October to cope with unfavourable currency movements. Other food makers have since followed Unilever’s lead, with Premier Foods raising its prices on Oxo stock cubes, Bisto gravy and Mr Kipling cakes.

Heineken and Carlsberg have put up the price of a pint along with Molson Coors, maker of Carling, and Anheuser-Busch InBev, the company behind Budweiser.

The latest warning comes amid intensifying fears of a sharp increase in the cost of living this year. Inflation hit a two-year high in December at 1.6 per cent. Some analysts predict a rate of up to 3 per cent in 2017.

“Our survey shows that inflation is going to be an important concern for businesses over the coming year,”

Dr Marshall said.