Businesses under the cosh as inflation reaches record levels

Commenting on the Office for National Statistics inflation figures for July 2022, Managing Director of Business West, Phil Smith said:

“The rise in Consumer Prices Index inflation to 10.1% is the tenth monthly increase this year and yet another record high.

“Firms are facing a myriad of issues on top of this, including soaring energy prices which are due to skyrocket during the autumn and will inevitably lead to further struggles.

“Our recent survey found that over half of firms are telling us they expect to raise their own prices over the next quarter. Utilities, labour costs, and raw materials are all cited as the main drivers of costs and businesses have been telling us about this inflation shock for over a year now.

“This squeeze on businesses’ operating costs is also reflected in the latest Producer Price Inflation figures which show a 23% rise in the year to July 2022, the highest level since records began in 1985.

“It is crucial that Government, despite the current political uncertainty, takes action to support businesses by showing it has plans to aid economic recovery.

“The two main choices which would have the most immediate impact would be to reform the Shortage Occupations List to help fill the 1.3 million current job vacancies and reduce businesses’ energy costs by expanding the energy bills rebate scheme.

“With no energy price cap for businesses, this is forcing some businesses to close, so it is imperative the right support is available to avoid further economic downturn.

“The autumn budget will be an opportunity for the new Prime Minister and Chancellor to put in place a plan to help stabilise the economy so businesses can weather the storm.”

“With no energy price cap for businesses, this is forcing some businesses to close, so it is imperative that action is taken now.”