57% of UK Businesspeople Say Supply Chain Disruptions Will Last Another Year

Andrew Bailey, Governor of the Bank of England (BOE)
Photo by Reuters Yonhap News

[Asia Economy Reporter Park Byung-hee] A survey found that six out of ten British businesspeople believe the global supply chain disruption will continue for at least another year.

According to major foreign media on the 18th (local time), accounting firm Deloitte surveyed 92 chief financial officers (CFOs) of major UK companies during the third quarter of this year (September 20 to October 4), and 57% responded this way. Additionally, 59% reported having actually experienced supply chain issues in the past three months.

Regarding the timing for demand to recover to pre-COVID-19 levels, 52% of respondents expected it to be "in 2022 or later," while 7% said "by the end of 2021." Meanwhile, 41% answered that demand has "already recovered."

When asked about the UK inflation rate outlook two years from now, 54% of respondents predicted it would be "2.5% or higher."

The Bank of England (BOE), the UK's central bank, has an inflation control target of 2% for its monetary policy. The UK's inflation rate exceeded this target by recording 2.1% in May. The inflation rate rose further to 3.2% in August. The consumer price inflation rate for September, to be released on the 20th, is also expected to remain at 3.2%.

BOE Governor Andrew Bailey initially expected the inflation rise to be temporary but has recently expressed views that the high inflation may persist for a longer period.

At the BOE's monetary policy meeting last August, the inflation forecast for the end of this year was sharply revised upward from 2.5% to 4.0%. As a result, the timing for BOE's base interest rate hikes has accelerated, with expectations for an increase within this year emerging.