Amid a grueling cost of living crisis and high inflation, January 2023 presented economic commentators with reason to be positive, as inflation levels dropped to 10.1% in the UK.
This marked the third successive month of price inflation falling; a trend that all were hoping would continue for many more months.
However, the Office for National Statistics (ONS) reported a rise in inflation for February 2023, as the Consumer Price Index (CPI) shot up to 10.4%.
The figures indicate further tumultuous times ahead for businesses and consumers alike.
Currently food inflation is at a 45-year high, energy support for businesses has been slashed, and the Chancellor’s recent Spring Budget chronically under-delivered for SMEs.
Reaction to the February Rise of Inflation
Responding to the latest inflation data from the ONS, David Bharier, Head of Research at the British Chambers of Commerce, said:
“An unexpected rise in the CPI rate to 10.4% indicates that the UK economy is still in the midst of a stubborn peak.
“The main drivers of inflation – restaurants and hotels, food, and clothing – confirm the pressure we see on the hospitality and retail sectors.
“The longer this goes on, the greater the impact on businesses and consumers as much higher prices become the norm.
“The BCC’s most recent Quarterly Economic Forecast expects the inflation rate to ease to 5% by Q4 2023 but small firms still face a mountain of cost pressures that is stifling their ability to invest and grow.
“While today’s Producer Price Inflation (PPI) rate has eased to 12.7%, it still remains historically high and above CPI.
“The March budget saw little in the way of support for the unprecedented cost pressures businesses face.
“Relief can come in several forms – for instance, support to transition to more energy efficient sources and improving our trading relationships to ease supply chain difficulties.”
Small businesses access unsecured, fast funding from Got Capital. As an alternative lender, Got Capital offers financing solutions specifically designed for and catered to the needs of SMEs.
