// Retailers face risk of soaring shipping costs and goods shortages ahead of Christmas
// The Bank of England showed the Consumer Price Index sharply climbing to 4% by Christmas
Fashion retailers are facing the risk of soaring shipping costs and goods shortages ahead of Christmas as the Bank of England warns the UK will suffer a lengthy bout of post-Covid price pressures.
The bank’s latest forecasts showed the Consumer Price Index, which currently stands at 2.5 per cent, sharply climbing to four per cent by Christmas – the highest level since December 2011.
Its estimation signalled that inflation would remain above its two per cent target throughout next year, driven by soaring commodity prices and shipping costs, and stock shortages, before returning to target in mid-2023.
Fashion retailers are concerned of the effects it will have on their businesses.
Global supply chain bottlenecks have sent shipping costs soaring – on popular routes rates are up six-fold in the last year.
Coupled with a shortage of raw materials that has pushed up prices, importers are raising the cost of goods to deal with these shocks, stoking fears of an inflationary spiral.
In June, the UK’s rate of inflation leapt higher, with more expensive clothing prices being one of the main drivers behind it.
The ONS said the Consumer Prices Index (CPI) hit 2.1 per cent for May, ahead of the Bank of England’s two per cent target.
It represented an increase on the 1.5 per cent reported by the ONS for April.