Retailers face shortages of goods ahead of Christmas
// Retailers face risk of skyrocketing shipping costs and merchandise shortages ahead of Christmas
// Bank of England showed consumer price index climbs sharply to 4% by Christmas
Fashion retailers face risk of skyrocketing shipping costs and merchandise shortages ahead of Christmas, as Bank of England warns UK to face extended period of post-Covid price pressure .
The bank’s latest forecast showed that the Consumer Price Index, which currently stands at 2.5%, climbs sharply to 4% on Christmas – the highest level since December 2011.
His estimate indicated that inflation would stay above its 2% target throughout next year, due to soaring commodity prices and shipping costs, and stockouts, before returning to the target in mid-2023.
READ MORE: Inflation exceeds Bank of England and analysts targets at 2.1% in May
Fashion retailers are worried about the effect this will have on their businesses.
Global supply chain bottlenecks have driven up shipping costs – on popular routes, fares have increased six-fold in the past year.
Coupled with a shortage of raw materials that has driven up prices, importers are raising the cost of goods to cope with these shocks, stoking fears of an inflationary spiral.
In June, the UK’s inflation rate surged higher, with rising clothing prices one of the main drivers.
The ONS said the Consumer Price Index (CPI) reached 2.1% in May, ahead of the Bank of England’s 2% target.
This was an increase from the 1.5% reported by the ONS for April.
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