FOUR out of five United Kingdom businesses say that high energy bills will force them to raise prices in the next two years, signalling that the impact for households from Europe’s crisis has yet to subside.

A survey conducted by PricewaterhouseCoopers showed that 81 per cent of companies plan to raise the price tag on their products or services, slightly higher than the share of firms that reported doing so over the last two years.

While Europe’s energy prices have come down significantly from the peaks observed during the crisis that followed Russia’s invasion of Ukraine, they are still significantly above historic averages and are prone to regular bouts of volatility. UK gas futures for delivery in the next two years are twice as expensive as they were three years ago.

Until the shift to a decarbonised energy system leads to more predictable, controlled costs, UK businesses will “continue to suffer the effects of volatile prices, and remain at the mercy of the geopolitical forces”, said Vicky Parker, sector leader for power and utilities at PwC UK.

Meanwhile, the Bank of England is watching carefully for signs of domestically generated inflation and is monitoring how much companies try to pass on rising costs to their customers through higher prices. Services inflation in the UK has been stronger and stickier than in the euro area or the United States, leaving the British central bank more reluctant than its peers to contemplate cutting interest rates. BLOOMBERG