Industry reaction from Dun & Bradstreet on UK inflation hitting 10.1%

Following today’s news that inflation passed 10% and hit a new 40-year high last month, Tommaso Aquilante, Associate Director of Economic Research at Dun & Bradstreet, said: “Recent months have seen a rapid decline in the UK’s economic outlook, with rising inflation and energy prices contributing to dimming economic prospects. The ongoing Ukraine-Russia conflict continues to affect companies and governments throughout Europe, at a moment when raising interest rates start to put pressure on public finances.

“Looking underneath today’s 10.1% headline figure, one can see that inflation is widespread across the different sectors of the UK economy, with the majority of product divisions considered by ONS contributing to increase prices, albeit at different extents. With producer price inflation (PPI) still rising, and the energy price cap expected to climb once again in October, the Bank of England will likely tighten monetary policy further at the coming meeting of the Monetary Policy Committee.

“Soaring inflation, higher interest rates and political uncertainty increase volatility in exchange rates. Businesses that trade worldwide or utilise foreign suppliers may need to reassess financial risks, not least those induced by spikes in the GBP/USD or GBP/EUR exchange rates. Using multiple currencies can help, but a strategy aimed at minimising currency risks will have spotted them both upstream and downstream. This is where data can provide firms with an informational advantage. After all, data is information on a phenomenon or business of interest. As such it can provide a fuller picture of a business’s suppliers and (potential) customers so they can spot cash flow problems and help the company make decisions.”