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Inflation and your business or charity Nov 22

ended 15. November 2022

On Wednesday morning (16th Nov) at 07:00, we're getting the latest inflation data, which will dominate the day's news. Inflation is currently at 10.1%, 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 contracting economy and soaring inflation (not to mention political mayhem)?
  • How are inflation and the broader cost of living crisis impacting your mental health?
  • How confident are you feeling right now as a business or charity owner?
  • The Bank of England is raising rates to bring inflation under control, but is this the right or wrong approach given what's causing inflation is beyond its control and the fact we're on the cusp of the longest recession in living memory?

Any other thoughts, jot them down. Two paragraphs MAX please. 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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Dr Anita Raja0
GP /Doctor at Dr Anita Raja
As a GP, my biggest concern is the impact of such high inflation on the mental wellbeing of people. We are now seeing more patients call in due to stress-related issues, much of which is down to money worries and the cost of living crisis. This, of course, is having a knock-on effect on the healthcare system and NHS, as a growing number of people need support for mental health-related problems. Within the healthcare system itself, we are already seeing nurses and other members of staff needing to go to food banks as their pay, in real terms, has been hugely impacted by the current level of inflation. The government needs to look at subsidising the living and food costs of all those who are struggling to put food on the table. The economic crisis is rapidly turning into a mental health crisis.
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Jennie PrewettVerified
Founder and Trustee at Incredible Kids
Inflation is having a devastating impact on charities, as people have less disposable income and are not in a position to donate, even if they want to. Right now, the people we help, namely families with disabled children, can't turn the heating off, can't save on petrol and can't swap to different cheaper brands of food without causing harm or distress to vulnerable children. The cost of living payments we receive are welcome but they fall woefully short of what's needed for carers managing on the very tightest budgets. Charities are under unprecedented pressure and we are arguably only at the beginning of what the Bank of England predicts could be the longest recession on record.
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Natalia Kubler0
Founder at Pearls & Pomegranates
I launched Pearls & Pomegranates, an e-commerce marketplace for ethical and sustainable independent jewellery brands earlier this year, after planning and preparing for five years to launch. It feels like the absolute worst time to have launched a business. Raw material costs for the jewellers I work with have risen sharply, which has meant that the price of some of the jewellery on the website has had to be increased twice already in the past nine months alone. Because they're small independent jewellers with small margins, they can't afford to absorb the changing input costs in the same way that large retailers who produce on a mass scale have been able to. It then makes it look like the jewellery they sell is hugely expensive. This, combined with the fact that people are not spending money on luxuries like jewellery due to rising energy bills and mortgage payments, has meant that sales are at a record low for almost all the jewellers I work with. To try and counteract inflation, I have had no choice but to increase the price of the jewellery and also my commission to jewellers earlier this year. I am now also being forced to consider increasing commission again because of rising website costs and need to spend more money on marketing. I fear these price rises erode trust for both customers and for the jewellers in my brand. It's very stressful to have these worries immediately after launching a business. I fear that I will need to shut my business down before it's even had the chance to get started.
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Amanda Rutland0
Artist at Gorgeous Gourds
As an artist, my work is classed as a luxury, and the number of people who can afford luxuries like art is dwindling rapidly. To carry on and make a living, I'd have to compromise by making smaller, cheaper pieces, which impedes the integrity of my art. More generally, the current economic crisis is pushing people to cheap imports rather than supporting artisans. For artists and independent makers, it is a torrid time right now and there's no end in sight.
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Sam Alsop-HallVerified
Chief Strategy Officer at Clive Henry Group
Our business has grown over 300% from 2019 to 2022 so you’d think confidence would be sky high. However, rising interest rates, a contracting economy and soaring inflation are making us more and more conscious of hiring decisions, when to make investments in our infrastructure and also how long we can continue without making cutbacks. The current business climate is more challenging for us than the pandemic ever was. More worryingly still, Jeremy Hunt is about to deliver his first budget, which is going to straightjacket small businesses just as we enter the longest recession in history. As business owners, we will be paying the most tax both as individuals and as a company, trying to keep our team members employed and happy while they feel the pinch of the cost of living crisis and trying to grow our public sector-focused business while that sector makes deep cuts. Many business owners will struggle with their mental health in the coming weeks and months.
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Samuel Mather-HolgateVerified
Independent Financial Adviser at Mather and Murray Financial
I'm more worried about the Bank of England's response to inflation than inflation itself. The cost of living has increased a lot with energy prices hitting home the most. However, as these increased costs are already restricting demand and with an increased tax burden that will be implemented by the government I fail to see the rationale for the central bank inflicting more pain on businesses and households by increasing the rate of lending at a time the walls are closing in from every other side. The bank are failing to recognise the restrictions forced on business and household budgets and see out of touch and overly reactive to historic data. A much more sensible approach would be for them to look forwards at the impact the recession will have and realise that increasing rates now will be counter productive.
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Riz MalikVerified
Independent Financial Adviser at R3 Wealth
Hiking up interest rates will have little impact on overall inflation which the Bank of England predicts will fall sharply from the middle of 2023. Over 50% of the weighting of the basket used to determine the inflation is food, housing & household services, and transport. Regardless of rates, people still need to eat, live and move. Although the end of the war in Ukraine could help reduce inflation, we are also seeing the fallout of Covid and the 'B' word that politicians do not like to mention. With a weakening economy, tax increases from the budget, and a recession, lowering interest rates may be used as a measure to stimulate growth in the not too distant future.
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Michael OszmannVerified
Founder & CEO at Buy Britain
I believe that the concept of raising interest rates is to reduce inflation through reducing demand in an "overheating economy". As an online marketplace business serving hundreds of small UK manufacturers; I can tell you that our current problem is not an excess of demand! The government and the Bank of England seem to be fighting inflation on the wrong battlefront. They should be focusing on energy costs, which underpin many of the other cost rises we see in things like food and transport.
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Robert Bolohan0
Co-Founder at Lotuly
We've had the lowest couple of weeks ever in the first two weeks of November in terms of new enquiries, even lower than during the pandemic. Inflation, and the looming recession, are the two key reasons why. We made the decision to put our prices up from September and we are most probably going to have to up our prices again in December. Some of our clients actually have reacted really well and they do understand the difficulty in which we are currently in. We did lose some opportunities as it seems big companies are tightening up their budgets or take longer to approve a project. The pandemic has been a bit of a difficult step for us but nothing compared to the current economic crisis. It seems like everyone is pushing their marketing efforts towards next year instead of continuing to make improvements. It's like we live inside an economic situation full of fear and we are all waiting to see if it improves even though those decisions are putting others at risk of losing their business or struggle with the cashflow due to late payments. I was in a better mental state as a business owner during the pandemic than now. Even though we've 3x our turnover we are still on the limit with staying afloat and we've already cut costs wherever we can to keep ourselves like that but that's a struggle as it's harder to acquire those new customers because pricing seems it's the only thing 95% of them care about. I'm still confident in our abilities to over come it but it's not an easy situation, there's a lot of work to be done but as a small business owner you do feel powerless without any actual outside help. The livelihoods of a lot of people are at stake and no one seems to care, at this rate a lot of people will end up losing their home or suffer the consequences of getting into debt to be able to pay the current and future interest rates.
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Austyn JohnsonVerified
Founder at Mortgages For Actors
We are certainly seeing a drop in affordability for clients who need to stretch their income, as well as BTL lending, the loans are being stressed very high by the lower rate lenders. In a way, penalising those who want a bigger loan. We are not changing the way we work, we will continue to give the best advice for the same cost, our clients need us to help them, not wring them dry. The main issue we have faced is that a high % of our residential clients are self employed, variable income and not quite a fit for the mainstream. this means that we often need to go to the smaller building societies to find funding, they have recently been a bit wary and have been careful with their products and processes. I love at home, I am married and have 2 daughters, one a new-born mental health is fine... I think? Seriously though, the stresses and strains of daily life have not been properly addressed since the covid year, these will probably end up blowing up due to the cost of living etc putting worry in peoples mind. I'm always confident though, we work with what we have and do the best job in whatever circumstance that may be. We cant fight the river, but we can guide the boat. The BoE is right to raise rates if they think that will help keep things under control, they just need to be a bit more careful in their approach. So many, so quick is too big a shock for the market. This should have been phased over a much longer timeframe.
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Sara Hall0
Founder at Lilibet & Phil Publishing House
Two years into my small business and I feel like I've been dragged through a hedge backwards. The pandemic was brutal but now it feels like we've descended into a comedy of errors. The government and Bank of England seem to be all out of ideas, with businesses like mine at the mercy of market forces. The government feels rudderless, more taxes are likely in this week's Autumn Statement and it feels like small businesses like mine are having to scrap this whole thing out alone.