New figures released last week showed that the cost of living continues to rise in the UK. Inflation rates released by the Office for National Statistics (ONS) show an increase of 4.2% in the month of October, which is the highest rate in almost a decade.
There are a number of factors and issues that businesses are facing that have contributed to a rise in prices.
A continuation of the shortage of goods for many businesses is causing supply chain issues leading to an increase in prices. Businesses have also had to navigate the winding down of government support schemes such as the reduction in VAT for hospitality and leisure businesses.
Companies are also continuing to have difficulties in recruiting specialist staff in the transport and hospitality sectors, further contributing to a rise in overall prices.
Businesses have made the above issues abundantly clear to the government, it is now over to them to help tackle these issues to prevent any further increases.
The Bank of England aim to keep the rate of inflation at around 2%. It is the concern of many that this increase in overall inflation will lead to the Bank of England raising interest rates to tackle rising prices. With rising interest rates business confidence could take a hit.
As businesses continue to recover from the effects of the last 18 months, this potentially presents a challenge to companies’ confidence as well as discouraging consumers from spending. Business confidence should be protected moving forward and the government should be open to considering policy to keep this intact, especially in the lead up to the festive period which many businesses are heavily dependent upon.
The Chamber will continue to provide support to businesses and are here to listen to any concerns that you may have. To find out how we can help please call us on 01905 673600.