(Bloomberg) -- Chief financial officers of U.K.’s largest companies expect labor shortages and supply disruptions that are hampering the country’s economic recovery to last until 2023.
A persistent shortfall of workers, the lingering effects of the Covid-19 pandemic, and rising inflation were cited as the main sources of concern in study conducted by the consultancy and auditing firm Deloitte.
U.K. inflation expectations climbed to the highest since 2008 earlier this month, as supply chain bottlenecks, a surge in commodities and energy prices, and the need to raise wages to fill vacancies kept pushing prices higher.
Bailey Says Rising Energy Means Inflation Could Last Longer
U.K. and European businesses have had access to cheap credit to help weather the worst of the pandemic. That could end as the Bank of England is likely to raise interest rates soon to tackle inflation.
The U.K’s transition to more renewable energy also comes up in the survey as a major risk for British firms, ranking above the aftereffects of Brexit.
Most CFOs see insufficient or inadequate infrastructure and consistency from policymakers around the scale and pace of the necessary adjustment, even as they need to prepare their businesses to adapt.
Johnson Sees Green Investment Boom in Wake of Big Climate Plan
There’s an upside, too. Building reputation and brand, attracting and retaining talent, and differentiation from competitors are some of the benefits of the energy transition mentioned by executives.
Regarding what, exactly, will force businesses to make the needed investments to reduce their impact on the environment, customers were cited as the main driver, followed by public opinion, investors, employees and government policy.
©2021 Bloomberg L.P.