This week’s news that UK inflation fell sharply in October to its lowest rate in two years at 4.6% down from 6.7% the previous month, is encouraging. However, the reality for consumers is that prices are still worryingly high, affecting spending and hitting just about every business.
The government says its pledge to halve inflation by end of the year has been met early. But there is a limit to how much credit ministers can take for the fall as energy prices continue to fall from their record highs of last winter.
Economists have said the main reason inflation has fallen from its peak of 11.1% in October 2022 is due to a fall this month in the energy price cap, which limits what suppliers can charge consumers per unit of energy. They also note the Bank of England’s decision to raise interest rates, in a bid to cool demand in the UK economy and slow price rises. Rates are currently at 5.25%, a 15-year high, which has pushed up mortgage costs but also led to higher savings rates.
The data shows prices in the production sector continue to fall with input producer price inflation (PPI) now at –2.6%. The British Chambers of Commerce (BCC) Quarterly Economic Survey to which many of our members contribute, has been showing a fall in the number of firms expecting their prices to rise for the past five quarters.
Despite that, many firms are still struggling to invest, as they face the challenges of high interest rates, skills shortages and difficult trading conditions.
Next week’s Autumn Statement is an opportunity for the government to outline a clear strategy for growth. My previous blog was all about how Chambers of Commerce are calling for action from the Chancellor on planning, the energy grid, full expensing, business rates and occupational health.
Movement on these crucial issues can provide a springboard for business investment which will be the cornerstone of sustainable economic growth.
So, it is timely that Staffordshire Chambers of Commerce’s Quarterly Economic Survey (QES) is now open for responses.
The QES is the largest and most representative independent business survey of its kind in the UK and is closely watched by policymakers such as the Treasury, the Bank of England and the Office of Budget Responsibility whilst attracting a significant amount of media attention. Results are collated and fed into the BCC survey, and we really want to keep up our above average representative sample of how our local businesses are performing and an indication of future outlook. Surveys can be completed anonymously if you wish to, and the closing date is 5pm on Friday 24th November.
It would be greatly appreciated if you could add your input. It only takes a couple of minutes to complete the survey which you can find at this link: https://forms.office.com/e/tUmdeV965u
I would also be grateful if you could please forward the survey link to your business contacts and encourage them to take part.
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: firstname.lastname@example.org