Average intermediate consumption markups for the UK 1998-2019

Markup is a measure of the difference between the price a firm sells their goods and services for and the cost of the goods and services to the company. It shows profit earned by a firm on a product in relation to costs, indicating the amount of revenue a firm can make on a product relative to its direct cost. Between 1997 and 2019, there was an increase in average markups among firm in the United Kingdom by 11% (relative to the average markup in 2000), with this figure being driven by an increase in markups in the services sector, while manufacturing markups were less significant. Among the firms active in the UK over this period, it was firms at the very top of the markup distribution which are the cause of most of the rise in markups. This rise may reflect growing market power among service sector firms, who are able to charge prices for their products above those of their competitors' prices.