Inflation Drops, However Remains at a Historic High Level.

Inflation has dropped again, to 6.8% from 7.9% in June. This is welcome news to businesses that have been hit hard by constant pressures from price rises for many months. However, inflation remains at historically high levels and is significantly below the 2% target set by the Bank of England. The rising costs of hotels, air travel and rents are some of the main things keeping inflation high, according to the Office of National Statistics (ONS). The reduction in Inflation this month was driven by a reduction in the energy price cap and food costs rising less rapidly – particularly milk, bread and cereals. Interestingly, the UK is now back at the rate of inflation seen at the start of the War in Ukraine in February 2022.

The Bank of England are now expected to further raise interest rates. In our latest Quarterly Economic Survey Report, 30% of businesses indicated interest rates as a concern to their business. From the research we have collected, we can see that capital investment plans have decreased due to the increased costs businesses are facing. It suggests businesses currently have other priorities such as tackling high inflation and interest rates and as a result plans for Capital Investment have been put to one side. Businesses need to be confident that interest rates have reached their peak.

Our next data collection period for our Quarterly Economic Survey starts on Monday 21st August. As a Chamber of Commerce, it is essential that we hear from businesses to understand the new challenges they face and how they can continue to shape government policy over the next 3 months. Please have your say to represent your business at local and national level. Click here to take part in the survey. Your support is greatly appreciated.