By Siddharth Cavale and Anthony Deutsch

(Reuters) – Industry chiefs from around the globe have a simple message for central bankers who are trying to decide whether the inflationary pressures that are causing the problem are temporary: The prices will only go up.

As the world economy recovers from pandemic lockdowns, there are shortages of fuel, workers, and cargo ships. Companies ranging from chocolate makers to electric car manufacturers have to find ways to control costs.

Many of the biggest companies in the world are now passing higher prices on to customers and warning policymakers who are on the inflationary fence about how things will get worse.

“We expect inflation to be higher next year than this year,” said Graeme Pitkethly, finance chief at Unilever (NYSE:), 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.

Nestle, the largest food manufacturer in the world, announced earlier this week that it will increase prices for its pet foods, including Purina and Nescafe, in 2021, and again in 2022, as the raw material cost of the products continue to rise.

This is a contrast to the view from the boardroom. It also shows the more uncertain tone of central bank governors and finance ministers as they try to decide when to stop monetary stimulus and not impede the recovery.

An early draft of the communique that was sent to Washington’s top policymakers last week urged central banks to prepare to take “decisive steps to ensure price stability”. The language was changed after the meeting.

Instead, The International Monetary Fund’s Steering Committee (IMFC) urged global officials to pay attention to pricing dynamics but also “look out” for inflationary pressures as the economies recover.

The key question here is whether it is temporary inflation. Bruno Le Maire, French Finance Minister, said that nobody has an answer to this key question.

SCARCITY STRUCTURAL

Andrew Bailey, Bank of England Governor, stated that while he still believes the sudden rise in inflation (currently at 3.1% with the potential to rise), the British central bank will likely be the first to raise interest rates during the next pandemic.

Higher prices have been a problem for executives of companies that keep an eye on many commercial sectors like Randstad (global recruitment company), which has a global reach.

Randstad said on Thursday that it expected labour shortages https://reut.rs/3lYmIKe to persist for years to come with older employees leaving and fewer entering the workforce.

Randstad’s Chief Executive Jacques van den Broek stated that “we do believe that scarcity will be structural.” “Hot jobs in demand include those in education, technology, and healthcare.”

There have been wage disputes across several countries. One of Germany’s most powerful unions has called for an inflation-busting wage hike of 5.3% for close to 900,000. Construction workers.

ABB, a Swiss engineering company, is struggling to deal with the global shortage of semiconductors. ABB also claimed that labour shortages in the United States had impacted its deliveries of industrial robotics among others.

A shortage of chips is already affecting vehicle production all over the globe, leading to some lines being halted.

Swedish truckmaker AB Volvo claimed that, despite having strong demand, the shortage of parts such as chips or freight capacity was driving up prices and disrupting its production.

Schindler, an elevator manufacturer and escalator supplier in Switzerland, said that it was also cautious due to rising raw material prices and high cost inflation.

Christopher Waller (Federal Reserve Governor) stated that if inflation continues to increase at the same pace as it is now, rather than falling as predicted, then U.S. policymakers might need to “adopt a more aggressive policy response next year.”

If interest rates begin to rise, however, banks may be more profitable charging for loans.

Jes Staley (chief executive at Britain’s). Barclays (LON) He said that he is relatively comfortable with rising prices. A British annual inflation rate up to 4.4% could prove beneficial for the bank as long as economic growth supports it.

However, the bank staff will seek compensation to offset price increases. Germany’s public sector bank workers have staged strikes of protest to demand a 4.5% increase in their pay.