Impact of inflation - responses from all sectors

"Rising inflation is hugely concerning for business owners and presents another formidable obstacle for them to overcome following two years of reduced operations due to Covid, staff shortages and supply chain issues. Throw Brexit into the mix and this really does become a vicious cycle for many. Materials shortages and rising costs can means reduced business levels, which impacts income and provides less headroom for growth and recovery. The SMEs we serve are incredibly resilient and the classic British “keep calm and carry on” attitude if fortunately prevailing, for now at least. Supportive and flexible funding is really what keeps heads above water and with the Bank of England expected to raise rates again in February, this has never been more important."

"Inflation is a real concern and while, at the moment, we are holding our prices firm, I can see that by later in the Spring we will need to increase them. Brexit may be one factor in soaring inflation but I think by far the biggest impact on supply — and therefore prices — has been Covid-19. No one had it factored into business plans, it took everyone by surprise, demand stayed level but supply got constricted, so prices went up. In that sense it's 'O' level economics. Part of the problem is that we have become used to a low inflation, low interest rate economy. We all knew it would cycle around eventually, it always does, but we had it for so long many of us have forgotten what inflation feels like. We're now getting a sharp reminder."

"I absolutely hate raising our prices but the reality is we are being left with no choice. The vicious cycle of our suppliers having to pay more for all aspects of production leads to daily emails of price increases that put even greater strain on our business. We're not talking about profits any longer as it's a fight to survive rather than make money. We are reviewing our prices again in February. it's inevitable that we'll be hurting our own customers further with prices rises as we have no other choice."

"Our latest research shows that employees are increasingly concerned about the effect of rising inflation on their pay. Inflation is eating away at wages at a brutal pace we haven't seen for many years. Lower income workers are being hit particularly hard, especially as the cost of fuel and electricity rises. If employers don't want their workers joining the Great Resignation, they need to pay attention to inflation and increase wages to keep their pay competitive.”

"There are never any good options with inflation. Raise rates to control it and reduce business momentum and make mortgages and debts more expensive. Let it run rampant and the cost of living keeps going up. The Bank of England is re-discovering this predicament now and is simply damned if they do and damned if they don't. This is why for many years all Central Banks have a single mandate, which was to control inflation. This has slackened off over the last few years when inflation wasn't a concern and we are now paying the price — literally — for shifting priorities."

"Prospective mortgage borrowers are hesitant, right now. Many are concerned about the huge rise in the cost of living. Especially what's coming down the road in April, with the increase in National Insurance and much higher energy bills. However, we are seeing a lot of remortgage demand as people scramble to lock-in at what are still incredibly low rates. Fixing for five years or longer is very popular. For now, we haven't raised our broker fees as it's something we want to avoid if at all possible, but we're keeping it under review."

"The economy faces significant headwinds as the country recovers from the pandemic. Ongoing supply chain problems exacerbated by Brexit, the rising cost of living, tax increases on the way, and now political uncertainty with 'Partygate' sending shockwaves through Westminster and beyond. Against this backdrop it will be difficult for the Bank of England to raise base rates much beyond their current level."

"British manufacturers have been subject to regular increases in the cost of some raw materials since the beginning of 2021. Many absorbed the increases for as long as they could to remain competitive but eventually had to increase prices, too. The pandemic, Brexit and Evergreen situation caused huge supply chain disruption resulting in astronomical shipping fees that also have to be passed on to the customer. Now the energy crisis is adding another layer of cost. Raising interest rates won't solve any of these problems. We need a coherent long-term strategy across all government departments rather than knee-jerk reactions."