According to a Bank of England survey, British businesses aim to raise prices by 5% in the coming year, reflecting rising inflationary pressures across the economy. The figure was up dramatically from 4.2% in November, according to the central bank's monthly Decision Maker Panel survey of chief financial officers. It was the highest number since the survey began in 2017.

The findings add to the pressure on policymakers, led by BoE Governor Andrew Bailey, to rein in consumer price growth, which the central bank estimates to hit 6% this year, triple its objective. The rise in inflation reflects supply-chain strains exacerbated by the spread of the coronavirus variant Omicron.

Higher costs for energy, transportation, and raw materials resulted in a substantial increase in cost burdens last month, according to a survey of purchasing managers conducted by IHS Markit. It also revealed that input price growth has slowed since August's peak.

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"Despite concerns that economic growth has slowed as we enter the new year, service providers expressed strong optimism in the longer-term business picture," according to Tim Moore, Markit's economics director. "Since the autumn, the level of optimism has remained stable, implying that most businesses are only expecting a temporary drop in demand from the Omicron variant."

Labor shortages and cost pressures remained high in December with no signs of easing, the Office for National Statistics reported. The ONS business insights and impacts survey showed that 36% of businesses stated their costs had increased "compared to usual expectations," down from 38% in November. 

Another 15% said they were having trouble finding employees, a level that has stayed constant since October. To cover the rising expenses, around one-in-six companies, or 16%, indicated they were raising prices faster than projected.