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INFLATION AND YOU

ended 18. October 2022

On Tuesday morning at 07:00, we're getting the latest inflation data, which will dominate the day's news. Inflation is currently at 9.9%, way above the 2% target. Selection of Qs for you (no need to answer them all):

  • How is your business or charity being affected by inflation, e.g. reduced customers/clients/sales, increased raw material costs, soaring energy bills, staff asking for pay rises, etc?
  • What are you doing to try and counteract inflation, e.g. upping prices for your own products or services, or does that risk losing business?
  • What's been worse for your business or charity financially? The pandemic or the current economic crisis comprising rising interest rates, a stagnating economy and soaring inflation (not to mention political mayhem)?
  • How are inflation and the broader cost of living crisis impacting your mental health?
  • Do you have any faith in the Bank of England or Government to bring inflation back under control? Or are we at the mercy of market forces?
  • How hopeful/confident are you right now as a business or charity owner?

Any other thoughts, jot them down. Just 2-3 paragraphs will do. If you're a Premium user, your response will be edited by a seasoned hack.

11 responses from the Newspage community

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Bryony Lewis
Founder at T & Belle
As an online business selling breastfeeding gift boxes, the pandemic was actually a period of growth for my company but this year so far has been increasingly challenging. The cost of everything is in an upward spiral, from utilities and manufacturing to logistics and raw materials. Many small businesses are stuck in a position where they need to increase prices in order to survive. However, with customers tightening their belts to survive the cost of living crisis, sales and average spends are already down, so it's a risky strategy. I think every small business is gripped with anxiety right now, and every week I am seeing fellow companies being forced to close their physical or virtual doors and it is incredibly sad and very worrying.
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Natalie Bamford
CEO at Colleague Box
As a small business owner, I feel like I’m living under a permanent dark cloud due to the current level of inflation. The cost of everything is going up, and interest rates have now gone through the roof, too. I’ve tried looking for rainbows but it’s just one storm after another. The weathering of these storms is taking its toll emotionally, physically and mentally and I’m not sure how much more I can take. This is the bleak and stark reality of how running a business makes you feel in this day and age.
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Editor
Riz Malik
Independent Financial Adviser at R3 Wealth
We are so far away from the government's 2% inflation target, we need the Hubble Space Telescope to see it. I fear the Bank of England will continue to respond with aggressive rate rises to bring its 2% target back into focus. However, raising interest rates in isolation is not going to help solve the inflation problem as most of it is being caused by external factors that are out of our control.
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Imran Hussain
Director at Harmony Financial Services
Inflation is a source of constant and needling anxiety for millions of small businesses and the families that run them right now. Yes, there are countless external factor causing inflation but it doesn't help that the government have pretty much taken a jackhammer to our economy. The chancellor was sacked, but I think it's now time for the Prime Minister to go. The distance between her policies and what this country needs is roughly the same as that between earth and Pluto, namely 3.1 billion miles.
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Premium
Michael Oszmann
Founder & CEO at Buy Britain
How are UK businesses supposed to operate and compete effectively with this level of inflation and such extreme political instability? The incessant in-fighting in Westminster is taking all the attention away from the profound problems facing our economy that are affecting millions, namely inflation and energy costs.
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Dr Jackie Mulligan
Founder at ShopAppy
High Street businesses are having to fight harder for spend, at the same time the cost of their products, raw materials and energy bills are increasing. Many are trying to pass as little as possible of these cost rises onto the customer but that is impacting their long term viability. Small businesses continue to keep going and adapt but ultimately people have less spending power and that hurts. Our message to consumers is that even if you have less to spend, please spend it locally. 38p of every £1 spent with a local business stays in your local economy, supporting jobs and ultimately other families. Wherever possible, we should be shopping with our local small businesses and not lining the pockets of distant billionaires.
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Eddie Young
Director at Eddie Young Magic
Each day, thanks to inflation, millions of people are waking up with their stomachs in knots. It's eroding not just people's wealth but their mental health, too. Interest rates going up on top of soaring food, fuel and energy bills, is taking a severe toll on people around the UK. We don't just have a financial crisis, we have a rapidly escalating mental health crisis. The chaos in Westminster and uncertainty about what's coming next is pouring fuel on the fire.
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Graham Cox
Director at Bridging Hub
Tough love appears to be the only way to tame inflation. With the cost of living crisis, higher taxes and mortgage rates already three times what they were a year ago, many people's discretionary income will fall rapidly over the next year. In fact, so much money is being hoovered out of people's pockets, it's possible inflation could fall faster than expected. If it does, the Bank of England might have enough headway to reduce interest rates in 12-18 months' time. In the meantime, the base rate will likely reach 4%-5%, with mortgage rates probably in the 6-8% range. We need to buckle up for a brutal 12-18 months ahead.
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Racheal Straughan
Founder at Mayfli
Product-based businesses are really struggling with rising energy bills and the cost increase in raw materials. Small businesses have had Brexit, Covid and now an economy that feels like it is on the brink of collapse. I don't see many being able to survive this latest wave. Many businesses that started during lockdown and strived are now closing their doors. All the U-turns from the government aren't helping, either, as they gives businesses no stability and no one knows what's going to happen next. With the likes of Amazon and Etsy charging businesses anywhere from 13% to 40% on sales, this certainly does not help the UK small business with 86% of Britains buying through Amazon rather than directly with the UK small businesses or from the High Street. This needs to change or countless small businesses will be forced to close.
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Robert Bolohan
Co-Founder at Lotuly
I'm constantly being asked to lower my prices and have several of my clients pausing translation projects, which is hitting my business hard. As a small business owner, I am used to dealing with panic attacks but the increased costs of living and nothing being clear is putting me under more pressure than ever before. Stress and anxiety are embedded in millions of small businesses right now. I have to stop watching the news just to get some relief mentally. It's exhausting to run a business and always be on the verge of not knowing when your next client is coming from or when they will stop that big project you've been preparing for months. As a small business owner I believe we've been left out.
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Sara Hall
Founder at Lilibet & Phil Publishing House
Inflation is literally crippling small handmade businesses. Soaring energy bills and the constant sense of "not knowing" is seeing artists down brushes and switch off their kilns. Little artisan businesses are closing their doors all over the UK, and it's painful to watch. What used to be a positive and creative space has turned into a dark and frightening one in recent months. No one can afford the rising costs of energy, tools and materials. Our customers have deserted us, and it's no great surprise to be fair. In times like these, the gifts market is the first to suffer, as people are worried sick about their fuel bill and mortgages, and are not thinking about what will be nestling under the xmas tree this year.