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* Adds CBI survey, AutoNation, SouthWestern, Unilever detail
* Unilever warns prices will continue to rise next year
* Randstad says labour shortages to persist for years
* British manufacturers raise prices by most since 1980
By Siddharth Cavale and Anthony Deutsch
Oct 21 (Reuters) - For central bankers wrestling with the
question of whether inflationary pressures are transitory,
industry chiefs around the world have a clear message: prices
are only going higher.
Shortages of workers, fuel, cargo ships, semiconductors and
building materials as the global economy bounces back after
pandemic lockdowns have companies from electric car makers to
chocolatiers scrambling to keep a lid on costs.
Some of the world's biggest brands are now passing on higher
prices to consumers and are warning any policymakers sitting on
the inflationary fence that things are going to get worse.
"We expect inflation to be higher https://reut.rs/3E3nsnk
next year than this year," said Graeme Pitkethly, finance chief
at Unilever, which says its products, from Dove soap to
Ben & Jerry's ice cream to Persil washing powder, are used by
2.5 billion people every day.
Unilever raised prices 4.1% in the third quarter and said
they would go up again by at least that in the final three
months of 2021, and might accelerate even more next year.
Earlier this week, the world's biggest food maker, Nestle
, said it would increase the prices https://reut.rs/3aXIHKX
of its products, which include Nescafe and Purina pet food,
further in 2021 and then again in 2022 as raw material costs
carry on climbing.
A long-running survey showed British manufacturers raised
prices by the most since 1980 https://reut.rs/3C2JBBz in the
three months to October to cope with surging costs and labour
shortages - and their cost expectations for the coming quarter
were the highest since 1977.
The view from the boardroom contrasts with a more ambivalent
tone among finance ministers and central bank governors faced
with trying to work out when to start withdrawing monetary and
fiscal stimulus without choking off the economic recovery.
STRUCTURAL SCARCITY
A draft communique ahead of a gathering of top policymakers
in Washington last week called on central banks to be ready to
take "decisive actions to maintain price stability". But by the
end of the meeting, the language had been toned down.
Instead, the International Monetary Fund's steering
committee urged global policymakers https://reut.rs/2XCxP28 to
monitor pricing dynamics closely but "look through" inflationary
pressures that will fade as economies normalise.
"The key question is to know whether this is a transitory
inflation or not. Nobody has a response to that key question,"
French Finance Minister Bruno Le Maire said last week.
Bank of England Governor Andrew Bailey has said he continues
to believe the recent jump in inflation - currently at 3.1% and
forecast to climb - is temporary but the British central bank is
widely expected to be the first major monetary authority to
raise rates in the post-pandemic cycle.
For executives at companies with a finger on the pulse of
dozens of commercial sectors, such as global recruitment firm
Randstad, some of the problems leading to higher
prices are structural.
Randstad said on Thursday that it expected labour shortages
https://reut.rs/3lYmIKe to persist for years with older
employees leaving and fewer entering the workforce. Randstad's
own personnel costs jumped 3% in the third quarter as it added
2,600 full-time positions.
"We do think that scarcity is going to be structural,"
Randstad's outgoing Chief Executive Jacques van den Broek said.
"Jobs in demand are in healthcare, education, technology and
logistics."
Wage disputes have emerged in several countries with one
union in Germany, Europe's largest economy, calling for an
inflation-busting wage increase of 5.3% for nearly 900,000
construction workers.
SUPPLY CRUNCH
Swiss engineering company ABB, which is grappling
with a global semiconductor supply crunch, said labour shortages
https://reut.rs/3ndlsSM, especially in the United States, had
hit its deliveries of industrial robots, among other products.
The scarcity of chips has already hurt vehicle production
around the world, bringing some assembly lines to a halt.
Swedish truck maker AB Volvo said on Thursday
that while it was facing strong demand, shortages of components
such as chips and freight capacity were both driving up costs https://reut.rs/3pnDWTf
and disrupting its production.
Swiss elevator and escalator manufacturer Schindler
said it too was cautious about its outlook due to higher raw
materials prices https://reut.rs/3m0tsHg, soaring cost inflation
and supply chain bottlenecks that were set to persist.
Several U.S firms announced similar issues on Thursday.
Southwest Airlines said it expected its overall costs to
rise 8% to 12% https://reut.rs/3m3Fxf8 in the final three months
of 2021, partly because of efforts to plug staff shortages.
The biggest U.S. auto retailer, AutoNation, reported
another quarter of record income https://reut.rs/3vAanyN as car
prices surged thanks to production cuts on chip shortages and
rising demand from consumers turning to personal transportation
in the pandemic.
Federal Reserve Governor Christopher Waller said this week
that if inflation keeps rising at its current pace in the coming
months, rather than subsiding as expected, U.S. policymakers may
need to adopt "a more aggressive policy response https://reut.rs/3G9xHbO
" next year.
Should interest rates start rising, though, banks will
benefit from charging more for loans.
Jes Staley, chief executive of Britain's Barclays,
said he was relatively relaxed https://reut.rs/3m0rCq0 about
rising prices and an annual inflation rate of up to 4% in
Britain could be positive for the bank, as long as it was
supported by economic growth.
But banking staff will be looking for compensation for
higher prices. In Germany, Europe's biggest economy, workers at
public sector banks have staged warning strikes to underscore
their demands for a 4.5% pay rise.
(Reporting by Reuters staff; Writing by David Clarke; Editing
by Carmel Crimmins)
