Cost Push Inflation : 

Cost push inflation occurs when firms increase prices to maintain or protect profit margins after experiencing a rise in their costs of production. Cost-push inflation happens when costs increase independently of aggregate demand. The main causes of cost push inflation are:

Rising imported raw materials costs perhaps caused by inflation in other countries or by a fall in the value of the pound in the foreign exchange markets.

Rising labor costs - rising labor costs are caused by wage a increase, which are greater than productivity increases this, is especially important in industries, which are labor-intensive. If wages account for 25% of a firm's total costs then a 10% increase in the total wage bill will cause the firm's total costs to rise by 2.5%.

Firms may decide not to pass on this to their customers (they may be able to achieve some cost savings in other areas of the business) but in the long run - wage inflation does tend to move closely in line with general price inflation in the economy.

Higher indirect taxes imposed by the government such as a rise in the specific duty on alcohol and cigarettes, an increase in fuel duties or a rise in the standard rate of Value Added Tax. These taxes are levied on producers who, depending on the price elasticity of demand and supply for their products can opt to pass on the burden of the tax onto consumers.

As resources run out, their price will inevitably gradually rise. This will increase firms' costs and may push up prices until they find an alternative source of raw materials (if they can). This has happened with fish stocks. Over-fishing has put many types of fish and fish-based products under extreme pressure, forcing their price up.

Cost inflation is more likely when unemployment is falling to low levels. In these circumstances there will be shortages of skilled labor. This means that businesses may have to offer higher pay to attract and retain their best workers when they are looking to expand their output.