This week’s inflation data from the Office for National Statistics (ONS) illustrates that while consumer price and core inflation remain stubbornly high, businesses’ input prices have fallen.
Inflation fell to 7.9% in the year to June – down from 8.7% in May.
It means the rate of inflation has slowed more than expected largely due to fuel and food prices rising less quickly.
Inflation peaked at 11.1 per cent last year and has been on a downward trend since then but is still well above the Government and Bank of England target of 2 per cent – It may be some time until we see that again!
The Bank of England has raised rates 13 times since December 2021 to try to cool soaring price rises, driving up borrowing costs for millions. However, many leading economists now believe it is now under less pressure to act after inflation slowed.
While firms’ costs are now much higher than a year ago, the fall in the input rate will offer a glimmer of hope that consumer price inflation will soon start to ease. However, the drivers of price rises have shifted with labour costs now the most significant factor. This may slow down the rate of CPI decline – due to the high number of job vacancies.
“The latest British Chambers of Commerce (BCC) Quarterly Economic Survey in July, of 5,000 businesses, (with 200 of those being Staffordshire businesses) showed that fewer firms are now expecting their prices to rise, and while inflation remains the top concern, the numbers of worried businesses have been falling since the end of 2022.
As we know, the causes of inflation are diverse with most businesses, (68%) now citing labour costs as a key pressure, 63% citing utilities, and 45% citing raw materials. Labour costs will undoubtably remain an issue for business for some time; although the figure has been steadily falling, there are still around a million job vacancies in the UK.
However, for manufacturers, 75% cited raw materials as the main cost pressure, and hospitality firms were far more likely than all other sectors to cite utility costs as a worry.
In general, the QES data shows there has been optimism building in the business community that future price rises might not be inevitable. This week’s ONS findings will be an important factor for the Bank of England to consider going forward.
The next QES will launch in August, and we would really value your input to grow the response rate from our county. It takes about two minutes to fill out the survey. You will get notification of the survey by email and in Daily Focus.
Away from inflation and other worries now.
‘The Better World Festival’ organised by Stoke-on-Trent City Centre BID, returns to Stoke-on-Trent for its third year on Saturday 29th and Sunday 30th July.
It is a free, family-friendly event and I am delighted that Staffordshire Chambers of Commerce is sponsoring the Festival with its exciting range of performances across two stages, zones for mindfulness and an artisan market. Its the perfect (free) event for you and your staff to visit for a great family event and I hope that you encourage all of your colleagues, friends and families to go.
The World Music Stage located on Piccadilly is set to showcase acclaimed artists specialising in global music including Royal Bollywood Music Strings, Kotu Drummers and Los Gitanos Kings, with headline spots secured by award-winning DJ Kavita and World folk rap band Mobius Loop. Better World Festival favourites are also set to return, including Jon Walklate, July Julay and Julia Mosley.
Complimenting the musical line-up, Better World Festival will bring together speakers, activists, pioneers, charities, community groups and artisan market vendors with an interest in creating positive change during this weekend event.
This includes our very own, Kate Beardmore, our President, who will be delivering an exclusive insight into ‘Wellbeing Tips for Daily Living’ in the Wellness Area located on Market Square at 2:30pm on the Sunday.
Charities members from Staffordshire Chambers of Commerce will also be exhibiting and showcasing their vital work in the local community.
I do hope you can find time to visit the Better World Festival. You won’t be disappointed!
Better World Festival 2023 – Stoke BID (stokeontrentcitycentre.co.uk)
If you want to talk to us about any business issues, including funding, you can call our switchboard on 01782 202222, call the Business Helpline on 0300 111 8002 or email: info@staffordshirechambers.co.uk
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