How businesses and charities are being impacted by inflation

While inflation easing slightly to 3.4% is positive, business costs, especially staffing costs remain high. Confidence in the economy is tentative at best and stronger support from the government to help SMEs grow would be welcome, to rebuild trust in long-term economic stability.

The latest inflation figures will further fuel the fires of caution at the Bank of England and further cement a rate hold decision tomorrow. Inflation however, is still higher than the government target, so no cause for celebration yet.

We’re certainly seeing suppliers increasing their prices — and when coupled with the recent National Insurance rises, it really does bite.

While our business remains healthy and continues to grow despite these pressures, many small firms are feeling the strain. Rising costs are squeezing already tight margins and could reduce their willingness — or ability — to invest. That’s bad news for UK Plc in the short term, and even more concerning in the long term, as it risks undermining future growth and productivity.

My SME business clients are being assailed from all angles. Consumers, squeezed by rising energy and food costs, cut spending on non-essentials. Raw material and wage costs continue to rise, worsened by the NICs and minimum wage rises introduced in April. Confidence remains very low amid a flatlining UK economy, whilst charities have seen donations drop as households prioritize essentials at the same time as their operational costs climb. Demand for services like food banks has surged. Labour’s economic management is illiterate. You do not foster economic growth by hitting entrepreneurs and business owners every which way with the new employment rights bill still to make its ugly entrance.