LONDON • Supply chain problems that are weighing on the British economy's post-lockdown recovery will persist for at least a year, according to a survey of chief financial officers (CFOs) at top British companies published yesterday.

More than half of the CFOs surveyed by accountants Deloitte believed consumer price inflation would still be above 2.5 per cent in two years' time.

In August, the Bank of England (BoE) forecast inflation would only be slightly above 2 per cent in two years' time after hitting 4 per cent in the coming months. Since then, the economy has been beset by the kind of supply shortages affecting others around the world, plus a lack of staff that has been aggravated by post-Brexit immigration rules.

The BoE is now expected to raise interest rates for the first time since the start of the pandemic either later this year or early next year.

Deloitte said CFOs expected operating costs to rise by the most in the survey's 14-year history over the next 12 months.

A record-high proportion of CFOs also plan to increase capital expenditure, welcome news for Prime Minister Boris Johnson who this month berated employers for favouring migrant labour over productivity-boosting investment.

Deloitte's chief economist Ian Stewart said the increased investment plans were being driven by the impact of the pandemic and Brexit, as well as the transition to renewable energy.

The survey of 92 CFOs, 18 of them from FTSE 100 member companies and 32 from FTSE 250 companies, was conducted between Sept 20 and Oct 4.

Separately, the head of manufacturers' body Make UK called on the government to stop treating business as "the enemy within".

"Currently there is a feeling within industry that the government is still fighting the last war and sees business as the enemy within," said Mr Stephen Phipson, chief executive of Make UK. "Business has moved on and government must do too."

REUTERS