LONDON (Reuters – The Bank of England could soon raise interest rates, as costs are climbing at an alarming rate for British firms working in the services sector. This is according to a survey of business owners released Tuesday.

Confederation of British Industry reported that its quarterly survey of service companies showed the greatest increase in cost for consumers and businesses since 1998.

A separate data set from Lloyds Bank (LON:) Bank revealed that a record half of all businesses intend to increase prices, and that 25% of these companies expect to raise their pay rates by 3% or higher over the next twelve months.

Charlotte Dendy, CBI economist said that “record-breaking cost growth is threatening to place a winter freeze upon the service sector recovery next quarter.”

These surveys were conducted in November’s first half, just before the news about the Omicron version of COVID-19 lowered the confidence of investors in financial markets. Investors now believe that there is a 60% chance of the BoE raising rates in December.

The BoE anticipates that the inflation of consumer prices in Britain will reach almost 5% next year, after hitting a record 4.2% for October.

Higher interest rates won’t reduce the pressure caused by a worldwide surge in energy prices or supply chain problems. They may have a positive impact on the knock-on effect of higher interest rates if businesses increase their prices and employees demand higher wages in anticipation for permanent higher inflation.

CBI data Tuesday revealed that many businesses think they may not be able pass higher costs on full. The average selling price is set to increase by an unprecedented amount. However, service firms will see profits decline over the next three-months due to higher costs.

CBI revealed that the CBI had reported that businesses and professional services firms have experienced the most rapid hiring of employees since 2015.

On Tuesday, Indeed also published data that indicated vets, auditors, veterinarians and animators were the hardest-to-fill roles.