Bank of England governor Andrew Bailey has said companies are resisting the urge to pass increased energy costs on to customers. Speaking at an International Monetary Fund event in Bangkok, Bailey said firms were instead choosing to squeeze their own profit margins and seek other cost reductions to manage the pressures they face.
The approach suggests that businesses are absorbing inflationary pressures themselves rather than contributing to higher consumer prices. This behaviour could help limit the extent to which rising business costs translate into price rises that affect households across the UK.