The cost of doing business in the UK is continuing to rise, with inflation reaching double digits for the first time since 1982, reaching 10.1 percent in the year to July, according to the Office for National Statistics. In a recent Somerset Chamber of Commerce survey, inflation was cited as the main concern for the county’s businesses, with 85% saying it was more of a concern now than it was three months ago, a 4% increase from the previous quarter.
As food, energy, and fuel prices continue to rise, the Bank of England predicts that inflation will reach more than 13% this year.
Unsurprisingly, this is having a significant impact on business confidence, with nearly a third of those polled in the Chamber survey believing turnover will worsen over the next 12 months, while 43% believe it will improve. Just under a third (32%), believed profitability would improve, and 73% expected to raise prices in the next three months.
Worryingly, 56% of Somerset businesses said they were currently operating at or below capacity due to supply chain issues, recruitment difficulties, and price increases.
Almost 60% had attempted to recruit staff, with 60% having difficulty filling vacancies – nearly half of those for skilled manual/technical roles and around 45 percent for professional/managerial roles.
Businesses want to support their employees, invest and grow, and avoid raising prices for their customers, but they are given little choice. The government must act now and has levers to pull to provide critical assistance to businesses.
The two most immediate and significant options would be to review and reform the Shortage Occupations List in order to help fill the 1.3 million job vacancies, as well as to reduce businesses’ energy costs by lowering the VAT rate from 20% to 5%.
It is time to take action. It’s past time for the government to pay attention.
source : somersetcountygazette
