Can we tame inflation? | World Finance

Having seen operational costs rise by up to 15 percent since last summer, Clearly Drinks, a UK soft drinks manufacturer, had no other option but to increase the prices of its fruity water bottles by at least five percent. “Price rises and inflation have been on the horizon for quite some time now, but businesses are really starting to be significantly impacted,” says a despondent yet hopeful Claire Conolly, chief financial officer at the Sunderland-based company, adding: “As a manufacturing business, we have to be extremely agile and work smarter to remain a profitable business.”

Like many other businesses affected by inflation, the company has to improvise to stay competitive, investing in new technology and looking at different suppliers to bring costs down. But is that enough to chug along until the current wave of inflation fizzles out? “The firm has managed to continue its sustained growth against the difficult economic backdrop,” Conolly says. “We are hoping that these measures can be maintained for the long term.”

An old problem returns
Like Clearly Drinks, many businesses around the world are wondering how long this period will last. Inflation across the EU is expected to reach 6.8 percent this year, above the ECB’s two percent target. The UK, burdened with Brexit-linked inflationary pressures, saw inflation reach nine percent this April, a four-decade record. The picture is similar in the US, with inflation peaking at 8.3 percent, despite…