The British Chambers of Commerce, the British Independent Retailers Association and UKHospitality have explained that businesses are being squeezed from all sides and government help is imperative.
BCC director of policy and public affairs Alex Veitch said the rise in consumer prices index inflation by 9.9 per cent confirmed the sustained pressure businesses and consumers have been facing over the past year.
“This is also reflected in the squeeze on businesses’ operating costs as Producer Price Inflation figures remain at record highs of 20.5 per cent in the year to August 2022,” he said.
“While the rate of growth has eased slightly, this has been driven by a fall in motor fuel costs and other goods continue to rise. There is a limit to how long any firm can sustain these rising costs before something has to give. We know from our research that two thirds of businesses plan to increase their own prices.
“The size of last week’s Government intervention on energy prices should have a dampening effect on inflation when it is enacted.
“But the lack of detail on exactly how much help any individual business will get, and for how long, means very few will be planning to invest any time soon.
“There are also a whole host of other issues ranging from transport and shipping costs, raw material prices, energy sector regulation and the tight labour market that must be addressed.
“It is imperative the Government’s forthcoming ‘fiscal intervention’ provides business with confidence that there is a cohesive plan to take the economy forward.”
Helen Dickinson, chief executive of the British Retail Consortium, said the inflation rate of 9.9 per cent remains a significant concern for households that continue to face a cost-of-living squeeze.
“Energy costs are still the biggest component of inflation, and while the latest announcement to limit the rise in the energy price cap is welcome, consumers still face higher bills in October,” she said.
“Despite the substantial cost pressures bearing down on businesses and their supply chains, retailers are trying their best to support their customers. This includes expanding value ranges, implementing price locks on key goods, and raising pay for staff.”
Bira’s CEO Andrew Goodacre urged the government to reveal its plans saying the latest official GDP estimates have shown that while the UK economic growth rose in July after shrinking in June, economic indicators are further fuelling concerns that the economy is dipping into a recession.
“This makes it even more important for the energy support package for businesses to be clarified. Every day lost makes it harder for businesses to plan their strategy as we approach the busiest time of the year,” he said.
“Making the energy rate for businesses the same as consumers still imposes a 300 per cent increase on energy bills for many businesses, and that will still cause hardship for those business owners.
“We also believe that any review over the next six months should have a broader remit of looking at all business costs. There is limited prospect of prices reducing in six months’ time, and so we cannot afford to see business rates increase in line with inflation just as this business support comes to an end.”
In a survey conducted at the end of August to Bira members, 65 per cent of business owners had said a price rise would force them to reduce the number of staff they had or reduce wages, while 40 per cent were considering limiting opening hours, while 23 per cent were looking to permanently or temporarily close their business once the proposed price hike came in October.
