Latest figures show the Consumer Prices Index remains above the Government’s 2 per cent target at 2.6 per cent, while the Retail Prices Index has increased to 3.6 per cent.
As well as increasing inflationary pressure, tough business rates revaluation and rising employment costs has meant operating costs for small firms are at their highest in four years.
Mike Cherry, National Chairman at the Federation of Small Businesses (FSB), says: “Operating costs for small firms are now at their highest in four years. Increasing inflationary pressure has coincided with a bruising business rates revaluation and rising employment costs. Our entrepreneurs are paying themselves less and further increasing prices in an attempt to handle the strain. Four in ten small firms raised prices in response to April’s National Living Wage increase.
Mr Cherry goes on to question whether the current inflationary measure is fit for purpose and warned that the Chancellor needs to give careful consideration to the upcoming Budget.
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