I don’t know about you, but I am ready for the Easter break.

The Office for National Statistics (ONS) inflation figures coupled with the labour market statistics for April are both breaking records for the wrong reasons.

You can view the latest figures here: Home – Office for National Statistics (ons.gov.uk)

On Wednesday inflation data was released and as expected figures confirm that the UK is in the midst of an unprecedented inflationary surge amid accelerating global price pressures, including those from Russia’s invasion of Ukraine, leading to inflation figures we haven’t seen for 30 years.

Unsurprisingly March’s rise in inflation came from the increasing cost of housing and household services, including higher utility bills, rising fuel prices and more costly second-hand cars.

We are likely to see even worse in April, with the increase in the energy price cap and the reversal of the VAT reduction for hospitality likely to push inflation above eight percent.

The upward pressure on energy and commodity prices from Russia’s invasion of Ukraine will drive consumer prices higher for longer with inflation forecast to peak close to 10 percent later this year, following the expected energy price cap rise in October.

Soaring inflation has therefore raised the prospect of a notable slump in economic output in the near term by weakening consumer spending and damaging firms’ finances and their ability to invest and grow.

The Government must provide urgent financial support, through the expansion of the energy bills rebate scheme, to include small firms and energy intensive businesses, and an SME energy price cap to protect smaller firms from some of the price increases.

Now, on to the employment figures which are highlighting the nationwide hiring problems that firms are facing.

While payroll employment rose slightly and the unemployment rate continues to fall, the headline figures continued to be flattered by significant underlying factors, including a shrinking workforce.

The increasing number of vacancies highlights the historic hiring crunch facing firms. With rising economic inactivity confirming that lots of workers have seemingly quit the jobs market completely, severe staff shortages may hamper economic activity.

Although there was a rise in earnings growth, with inflation soaring, wages are still comfortably lagging behind price increases. If this continues as expected, real household incomes will be damaged further, stifling consumer spending, a key driver of UK economic output.

Weakening consumer confidence may limit households’ willingness to support spending by running down savings built-up during Covid to offset declines in real pay.

The deteriorating economic outlook and the financial squeeze on businesses from soaring energy bills and the national insurance rise risks weakening labour market conditions by dampening recruitment and limiting firms’ ability to increase wages and invest in their staff.

More must be done to help people access rapid retraining opportunities for in-demand jobs, including assisting older workers to turn to more sustainable jobs. Introducing a new skills tax credit to incentivise employers to invest in training for workers would help to revitalise employer-led training.

You can be assured that Staffordshire Chambers, along with the British Chambers of Commerce (BCC), will be keeping up the pressure on ministers to act to offset rising costs and invest in the jobs market.

And finally, a reminder that entries for the 2022 Staffordshire Chambers Business Awards close at 5pm on Friday 6^th May.

Our awards showcase and celebrate the best business talent in Staffordshire with a variety of award categories that cover everything from new start-up businesses to multinational corporations – as well as awards for individual employees.

It’s a great opportunity for you to spotlight your business and get recognition for your work during the last 12 months. Shortlisted businesses receive invaluable coverage in local press and across social media and will be invited to a gala evening celebration on 14th July. The entry process is simple and streamlined and you can enter as many categories as you like.

There are 15 award categories and one of the winners will also be crowned as overall Business of the Year.

For entry details and a full list of award categories and sponsors click here: www.staffordshirechambers.co.uk/awards

If you want to talk to us about any business issues, including funding, you can call our switchboard on 01782 202222 or call the Stoke and Staffs Growth Hub Helpline on 0300 111 8002 or email: info@staffordshirechambers.co.uk

Last week, the government announced a new 2022 Energy Strategy aiming to accelerate the transition to renewable energy sources such as new nuclear, hydrogen and wind power which will help to secure stable and affordable British energy in the long term.

Within the strategy, the government have prioritised the development of nuclear power, promising to deliver up to eight reactors by 2030. Additionally, planning reforms will be implemented in a bid to accelerate the approval for new offshore windfarms, and hydrogen production will be doubled, aiming to provide low-carbon energy for industry, power and transport.

As all UK Covid restrictions were removed earlier in the year and the global economy reopened, there was a huge surge in demand for everything from new cars to international holidays, which as a result drove the spike in demand for oil and gas, leading to the dramatic increase in the price of fuel. This was also accompanied by Russia’s invasion of Ukraine and as the price for gas is set internationally, Putin’s restrictions on the supply of Russia’s gas to the European market has pushed prices up further.

The increase in the cost of fuel has meant that the cost of living in the UK has also increased, putting many families and businesses under a lot of financial pressure, especially as gas is used to generate electricity as well as heat the majority of UK homes.

The government’s energy strategy is a step in the right direction towards helping businesses and households reach the net-zero targets, however the ten-point delivery plan is heavily focused on the future of renewable energy sources in the UK and does little to help businesses with the current record-high energy prices.

Whilst we welcome Boris Johnson’s statement regarding ‘reducing our exposure to volatile fossil fuel markets’, the strategy is a missed opportunity to announce support for businesses to help them overcome the soaring prices, such as introducing a temporary SME Price Cap or an expansion on the energy bills rebate scheme to include SMEs.

Sara Williams, CEO of Staffordshire Chambers of Commerce, said: “The long-awaited strategy has outlined some key areas that when implemented will change the future of British energy. The investment in eight new reactors alongside the increased investment in offshore wind, solar and hydrogen are crucial in order to enhance energy security and meet net-zero targets. However, it is important to note that this strategy is heavily focused on supply and is a long-term plan, which means that the current issues being faced by firms and households will remain.

“The strategy fails to mention energy efficiency and insulation, both of which will provide immediate cost reductions when installed. We would have welcomed further encouragement of the delivery of the cheapest forms of renewable energy in order to help us support businesses in the net-zero journey. It is now essential that the government continue to provide a clear plan and provide funding in order to increase the momentum on the drive to net zero.”

You can visit our Environmentally Conscious Staffordshire Campaign page for more information on what you can do to reduce carbon emissions and increase your business efficiency here: https://staffordshirechambers.co.uk/environmentally-conscious-staffordshire/

The results from the British Chambers of Commerce (BCC) quarterly economic survey (QES) for the first quarter of 2022 have highlighted the full extent of financial stress that businesses are under. With soaring inflationary pressures reaching record highs, firms are facing cost increases from all angles, ranging from energy bills and raw material prices as well as the rise in National Insurance.

The QES received over 5,600 responses and as the UK’s largest independent economic survey, it highlights the common issues faced by the business community on a national level and supports Chambers like Staffordshire to be the voice of the business community, as well as helping to shape and influence policy thinking with the information provided.

Whilst overall the survey indicated a solid first quarter for the UK economy, as the release of pent-up demand following the end of Plan B restrictions and reduced consumer concerns over Omicron helped support activity in the quarter. However, figures also highlight the significant headwinds facing the UK economy.

Historically, high price pressures suggests that the current inflationary surge will escalate significantly in the coming months. The reversal of the hospitality VAT cut, the higher energy price cap and soaring energy and commodity prices amid Russia’s invasion of Ukraine, should push inflation well above eight percent in the near term.

In Q1, more than 77 percent of firms surveyed cited inflation as a concern for their business, whilst 62 percent (a new historical high) also stated that they expect to raise prices, which is an increase from 58 percent in Q4 2021. This figure increased to 75 percent for production and manufacturing firms as well as firms in the retail sector. The results from the survey have demonstrated the rising inflationary pressures on firms reaching the highest they have been in 33 years, and this has caused the cost of business to increase significantly meaning that more firms are likely to see their cash flow weaken.

92 percent of manufacturing companies have cited that the increasing cost of raw materials has led to the subsequent increase in their prices. However, other firms have also noted that the energy and fuel costs, as well as finance costs, have played a significant role in price increases.

Only 42 percent of firms reported an overall increase in domestic sales which is a decrease from the previous 45 percent which was reported in Q4 2021. Then 16 percent of firms reported a decrease in their domestic sales, this figure has increased to 18 percent now. Despite firms in the services sector reporting a decrease of 5 percent in domestic sales compared to Q4 2021, firms in the manufacturing sector have reported an increase of 2 percent in domestic sales.

It was disappointing to see the Chancellor miss the opportunity to reduce the cost of doing business in his Spring Statement. We have continued to urge Government to provide urgent financial support to SMEs, by expanding the energy bills rebate scheme as well as introducing an SME energy price cap to protect smaller firms from the price increases.

It is also important to note the relevance of Russia’s invasion of Ukraine which has raised the risk of a renewed economic downturn, further aggravating the financial squeeze on businesses and households. It is now more important than ever that businesses are provided with the right support to ensure businesses have greater resilience to get through the uncertain times ahead.

Business Skills for Growth Survey

The figures above whilst sobering also highlight the importance that the skills agenda must play in getting the economy back on track as more than ever, businesses recognise that their workforce is their biggest asset.

Changes to the working world including higher customer expectations, economic uncertainty and round-the-clock markets mean that skill gaps in businesses are widening.

And, with Brexit and the push for every business to be ‘Net Zero’ by 2050, firms face a real challenge when it comes to their skill base and growth.

The Stoke-on-Trent and Staffordshire Local Enterprise Partnership (SSLEP), through its Skills Advisory Panel, is asking all organisations and businesses to take part in the Business Skills for Growth Survey to understand future business skills needs.

By completing the survey you’ll be helping to shape the evolution of skills provision across Stoke-on-Trent and Staffordshire that will come together through a network of support organisations and learning providers including Staffordshire Chambers. The survey takes around 25 minutes to complete, and your input is greatly valued in helping to shape our future economy.

You can access the survey, here.

If you want to talk to us about any business issues, including funding, you can call our switchboard on 01782 202222 or call the Stoke and Staffs Growth Hub Helpline on 0300 111 8002 or email: info@staffordshirechambers.co.uk

The British Chambers of Commerce’s Quarterly Economic Survey for Q1 received over 5,600 responses.  As the UK’s largest independent economic survey, the QES highlights the common issues faced by the business community on a national level and supports Chambers across the network to be the voice of the business community, as well as helping to shape and influence policy thinking with the information provided.

In Quarter 1, more than 77% of firms surveyed cited inflation as a concern for their business, whilst 62% of firms also stated that they expect to raise prices, which is an increase from 58% in Q4 2021. This figure increased to 75% for production and manufacturing firms as well as firms in the retail sector. The results from the survey have demonstrated the rising inflationary pressures on firms reaching the highest they have been in 33 years, and this has caused the cost of business to increase significantly meaning that more firms are likely to see their cash flow weaken.

92% of manufacturing companies have cited that the increasing cost of raw materials has led to the subsequent increase in their prices. However, other firms have also noted that the energy and fuel costs, as well as finance costs, have played a significant role in the lead up to the firm increasing their prices.

In Q1, only 42% of firms reported an overall increase in domestic sales which is a decrease from the previous 45% which was reported in Q4 2021. In Q4 of 2021, 16% of firms reported a decrease in their domestic sales, this figure has increased to 18% in Q1 of 2022. Despite firms in the services sector reporting a decrease of 5% in domestic sales compared to Q4 2021, firms in the manufacturing sector have reported an increase of 2% in domestic sales compared to Q4 2021.

Sara Williams, CEO of Staffordshire Chambers of Commerce, said: “The results from the survey of Quarter 1 of 2022 have highlighted the huge amounts of financial stress that businesses are under. With soaring inflationary pressures reaching record highs, firms are facing cost increases from all angles, ranging from energy bills and raw material prices as well as the rise in National Insurance.

“It was disappointing to see the Chancellor miss the opportunity to reduce the cost of doing business in his Spring Statement. We have continued to urge Government to provide urgent financial support to SMEs in particular, by expanding the energy bills rebate scheme as well as introducing an SME energy price cap to protect smaller firms from the price increases.”

It is also important to note the relevance of Russia’s invasion of Ukraine which has raised the risk of a renewed economic downturn, further aggravating the financial squeeze on businesses and households. It is now more important than ever that businesses are provided the right support in order to ensure businesses have greater resilience to get through the uncertain times ahead.

If you want to talk to us about any business issues, you can call our switchboard on 01782 202222.

Staffordshire Chambers are delighted to announce that we’ve partnered with LilaConnect to provide a very special offer to our members so that their employees can enjoy unrivalled home broadband speed and value.

Chamber members’ employees are set to receive free installation, their first three months completely free, as well as a further month of free service for every new customer they refer*.

LilaConnect’s full fibre network boasts the fastest internet speeds of up to 1 Gigabit, symmetrical upload and download speeds and no telephone line rental. It will future proof your home to handle your growing demands for bandwidth!

This is an invitation-only offer, available to all employees within a Chamber member organisation. To ensure your staff members and colleagues don’t miss out, they should register their interest by clicking here to complete and submit the linked form (please do not register via the website). A member of the LilaConnect team will then contact your colleagues to discuss their specific requirements.

*Cannot be used in conjunction with another offer, T&Cs apply.