THE latest ONS inflation figures released this morning show that inflation has reached 10.1%, the highest figure since 1982. Rising food prices made the biggest contribution to the month’s increase, indicating inflationary pressures are spreading beyond energy.
Reacting to this news, Alan Thomas, UK CEO at Simply Business, commented: “While the energy price caps do not apply to businesses directly, millions of small business owners are still experiencing increased energy bills at a time when costs are rising in most operational areas. Simultaneously, consumer purchasing power is going down as Brits cut back on non-essential spending, harming the books of SME owners.
“Our latest SME Insights Report showed rising fuel and energy prices are putting over half of UK small businesses at risk of collapse, with rising costs representing the single greatest threat to their survival. As a result, three in five (59%) small business owners are calling on the government to review or reduce the energy price cap.
“We know small business owners have been left with little choice but to implement survival tactics. Half (49%) will be raising prices, 48 per cent are halting new hires and two in five (40%) are putting expansion plans on hold. We’ve also seen over 20,000 small business owners apply for our £25,000 Business Boost grant – which speaks volumes to the financial pressure SMEs are facing right now.”
“Accounting for over 99% of all businesses and contributing trillions of pounds towards the economy, the government has to acknowledge the vital role small businesses will play in our collective recovery. And while it’s encouraging to see that SME confidence is improving as we emerge from the pandemic, ultimately, for our economy to bounce back as quickly as possible, we need to support our small businesses to do the same.”
Kevin Brown, saving specialist at Scottish Friendly , commented:
“Ever since the global financial crisis, individuals have been accustomed to receiving relatively low rates of interest on their savings.”
“But by eroding the real value of money, soaring inflation has severely reduced savings’ returns in recent months. Together with the Centre for Economics & Business Research we estimate that the real annual return on savings plummeted to an almost 50-year low of -8.5% in June. The last time it was lower than this was in February 1976 when it reached -9.5%.”
“Although spiraling living costs mean that millions of families don’t have the same ability to save or invest as they did a couple of years ago, this isn’t the case for everyone, with some UK households still lucky enough to have some disposable income to contribute towards some form of financial security.”
“The question individuals may ask themselves however, is what is the best approach when looking at ways to make their hard-earned money work harder? Now more than ever, having an emergency fund or rainy-day fund to fall back on can be of real value. If people have enough to put towards longer term goals such as a house deposit or retirement, then looking beyond cash accounts and thinking about the best ways to harness the potential for growth through investments may be a more feasible option to consider .”
