Supply chain crisis hammering consumer confidence, economic recovery and driving inflation to 10-year highs

The supply chain crisis is now impacting economic growth, business confidence, consumer confidence and inflation as reports emerge at a third or lorries on the roads are empty.

The UK’s ongoing supply chain crisis, which is affecting supply chains at every stage from transport to fulfilment, is beginning to have a far wider impact on the UK than empty shop shelves.

According to the latest figures from accountancy and business advisory firm BDO consumer price inflation hit a 10-year high in September.

“Ultimately, this could mean consumers end up paying more for less this winter,” BDO partner Kaley Crossthwaite said.

“Many businesses are caught between a rock and a hard place. Long-term planning for a post-pandemic and post-Brexit economy is crucial, but the significant challenges at their door make it increasingly difficult to focus beyond these short-term issues.”

This is already causing retailers like Levi’s to increase their prices to offset the growing supply chain cost pressures, mirrored by leading manufacturers like Pepsi and Corona beer maker Constellation Brands.

READ MORE: Government plans to shorten HGV driver testing process amid ongoing crisis

While the lack of drivers and petrol are slowing the rate of deliveries, wider issues relating to poor utilisation of distribution capacity are exacerbating delivery problems.

According to new statistics from the Department for Transport 31 per cent of lorries on the road are now entirely empty, while those that do contain goods are only 60 per cent full.

All this is hammering both business and consumer confidence, with both falling to their lowest levels so far this year, according to PwC.

PwC’s consumer markets lead Lisa Hooker said: “The inflationary factors that have triggered the decline in sentiment are unlikely to ease in the short term, particularly for grocery, utilities and petrol.

“Combined with the current problems facing those industries in relation to supply, we’re beginning to see it affecting consumers’ day-to-day lives and, in turn, sentiment and demand.”

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