Officials at the central bank will publish their latest forecasts for the economy, which are likely to show it contracting in the second quarter in response to aA separate study by the consultants EY-Parthenon revealed the number of profit warnings issued by UK-listed companies soared by 44% year on year in the first quarter of 2022, with a record number of firms citing rising costs for the weaker performance.
The report found that UK-listed companies issued 72 warnings in the first three months of 2022 – the highest quarterly figure since the start of the pandemic. A record-breaking 43% of warnings was due to rising costs, up from 27% in Q4 2021 and well above the 2011-21 average of 10%. Alan Hudson, a partner at the firm, said: “Inflationary pressures, which had been building throughout 2021, were already putting pressure on company margins and consumers’ real incomes.has contributed to greater supply-side pressures and raised questions about confidence and demand in 2022. We are now looking at a year with ongoing Covid-19 disruption alongside higher inflation, greater uncertainty and faster monetary tightening than we expected just a few months ago.
Kitty Ussher, chief economist at the IoD, said the invasion of Ukraine had “sent shock waves around British boardrooms”. She said some businesses were beginning to plan and consider new investments, but “optimism in the UK economy itself remains very low and is now the number one issue seen as having a negative impact on businesses, even above the other very real pressures of high energy costs, difficulties in the labour market and problems with international supply chains”.
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