CUMBRIA Chamber of Commerce has responded to an economic survey showing half of firms surveyed are planning to raise prices in the next three months despite cost pressures easing.

The British Chamber of Commerce’s quarterly economic survey (QES) for Q2 2023 shows data that revealed the main factor for increasing costs comes from wages instead of utility bills or raw material costs.

45 per cent of UK firms expect their prices to increase in the next three months, down from 55 per cent in Q1, while 68 per cent cite labour costs as the biggest driver of prices.

The survey, by the BCC’s Insights Unit, of over 5,000 firms – 92 per cent of whom are SMEs – also reveals business performance across different sectors varies considerably, with hospitality and retail firms suffering more widely from cashflow difficulties.

SMEs form the majority of Cumbrian businesses, with hospitality being a major industry in the county.

Growth in business activity remains weak, with no significant improvement to sales and cashflow data.

The percentage of firms reporting increased domestic sales remained largely static, with just 35 per cent reporting a rise (broadly unchanged from 34% last quarter).

Just 26 per cent of businesses said their cash flow has increased over the last three months, with pressures remaining the highest in hospitality and retail sectors.

Responding to the findings, managing director of Cumbria Chamber of Commerce, Suzanne Caldwell said: "These results continue to give cause for concern.

“The Bank of England needs to think seriously before implementing any further increases in interest rates.

“These are putting additional strain on many businesses while having little positive impact on inflation.

“It’s clear that established views of the way the economy works no longer hold true, with a need to consider different approaches.

“Lack of workers, whether already skilled or to be trained, continues to be a serious issue for most businesses.

“This isn’t something that businesses can address alone.
“Again the solutions aren’t simple and it will take a combination of actions to address this."

She said businesses in Cumbria are reporting that a lack of skilled workers in the the UK, particularly welders and engineers, has had a telling impact.

They also report Brexit limiting European expansion, noting an ability to export ‘much more’ when the UK was an EU member.