---
title: "Firms raise inflation forecasts as energy costs bite"
publisher: "Stockmark.IT"
author: "Stockmark.IT Website"
published: "2026-10-03T07:09:07+00:00"
modified: "2026-10-03T07:09:07+00:00"
date: 2026-10-03
canonical: "https://stockmark.it/price-pressures-hit-firms-amid-uncertain-outlook-and-fears-of-interest/"
category: "Energy"
categories: ["Energy", "Inflation"]
image: "https://i0.wp.com/stockmark.it/wp-content/uploads/2026/10/firms-raise-inflation-forecasts-as-energy-costs-bite.png?fit=1536%2C1024&quality=80&ssl=1"
format: "news"
language: "en-GB"
---

# Firms raise inflation forecasts as energy costs bite

**Published:** October 3, 2026
**Author:** Stockmark.IT Website
**Categories:** Energy, Inflation
**Featured image:** ![Firms raise inflation forecasts as energy costs bite](https://i0.wp.com/stockmark.it/wp-content/uploads/2026/10/firms-raise-inflation-forecasts-as-energy-costs-bite.png?fit=1536%2C1024&quality=80&ssl=1)

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Corporate inflation expectations for the coming year have increased, according to a closely monitored survey by the Bank of England. The results indicate that businesses are anticipating higher price pressures, which may intensify calls on policymakers to increase interest rates. The monthly Decision Makers’ Panel data reveals a growing sense of unease among firms as costs associated with the recent spike in energy prices are expected to be passed on to consumers.

One-year ahead consumer price inflation expectations climbed from approximately 3.1 per cent in August to 3.3 per cent in the most recent month. Predictions for longer-term inflation and wage growth also edged upwards, reflecting the accumulation of price pressures across the UK economy. A majority of the firms responding to the Bank’s data collectors reported that higher energy prices were significantly impacting their price-setting decisions. Additionally, a larger proportion of businesses indicated that uncertainty levels were very high, suggesting the UK economy is on less steady footing.

These survey figures heavily influence the Bank of England’s nine-member Monetary Policy Committee ahead of crucial monetary policy decisions. The next meeting is scheduled for a month from now and will take place after Chancellor John Healey’s Budget. Over the past week, several policymakers, including Governor Andrew Bailey, Clare Lombardelli and Sarah Breeden, have cautioned that interest rates may need to rise from the current 3.75 per cent if global energy prices remain elevated. Brent crude oil, a key international benchmark, hovered around the $100 per barrel mark on Friday. This represents an increase of more than 40 per cent from levels below $70 per barrel prior to the conflict in the Middle East in late February.

The Bank’s main forecast suggests inflation could exceed four per cent in the early months of next year. Both short-term and long-term UK government bond yields have risen in response. Bank member Catherine Mann has suggested that the central bank needs to raise interest rates to maintain credibility with markets. However, Bank official Alan Taylor stated on Wednesday that rate-setters must remain vigilant without reacting mechanically to energy markets. Taylor, considered a more dovish member of the committee, pointed to the weak labour market and falling food inflation as evidence that inflation may not rise as sharply as some economists fear. He noted that these developments suggest the economy is proving less susceptible to a repeat of the dynamics seen in 2022.

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**Original URL:** https://stockmark.it/price-pressures-hit-firms-amid-uncertain-outlook-and-fears-of-interest/
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