British companies came under intense pressure to push up prices this month after they suffered the fastest rise in the costs of production on record.
Steep increases in the price of raw materials, higher fuel costs and strong wage demands in November combined to increase the average cost burden at the most rapid rate since 1998 when comparable records began.
According to a monthly survey by IHS Markit, while all private sector businesses were hit equally by the higher input costs, only manufacturers reacted by accelerating the rate at which they increase their own charges. The price of manufactured goods rose at the highest rate in 20 years.
Service industry firms reported that on average they were unable to pass on all the extra costs after stiff resistance from customers.
Analysts said the rising cost pressures were likely to give the Bank of England extra impetus to raise interest rates at its next meeting in December.
Several officials on the Bank's monetary policy committee (MPC), including the governor Andrew Bailey, have hinted that a rate rise is imminent to calm rising levels of inflation.
Samuel Tombs, the chief UK economist at Pantheon Macroeconomics, said the survey evidence showing that firms continued to enjoy high levels of demand and were increasing employment "will reassure wavering MPC members that the economy can withstand a modest increase in interest rates at its next meeting on 16 December".
Chris Williamson, the chief business economist at IHS Markit, said: "A combination of sustained buoyant business growth, further job market gains and record inflationary pressures gives a green light for interest rates to rise in December."
There is intense speculation among investors that the central bank will the base rate from its pandemic emergency level of 0.1% to 0.25% before a further rise to 0.5% next February.
The IHS Markit/Cips flash composite output index registered 57.7 in November, down fractionally from 57.8 in October, but comfortably above the 56.3 average seen in the third quarter of 2021. An index figure above 50 indicates expansion.
"Survey respondents typically commented on rising client demand due to improving economic conditions and a continued boost from the roll back of pandemic restrictions," IHS Markit said.
Tombs said other surveys revealed a picture more in line with surveys by the Office for National Statistics (ONS), that show the economy slowing as it approaches the end of the year.
"For instance, we estimate from the ONS' Business Insights and Conditions survey that business turnover was 1% further below normal in the four weeks to 14 November than in the two weeks to 3 October.
"In addition, the risk that the economic recovery stalls for a couple of months in the face of a winter surge of Covid-19 cases remains uncomfortably high," he added.
Economists have also highlighted government measures to cut spending and raise taxes that will combine with rising inflation to eat into real household incomes over the next year.
"The outlook for a decline in real household disposable income over the next year, as businesses pass on higher costs to consumers and taxes rise, also suggests that the economic recovery will not better the third quarter's pace," Tombs said.