Business leaders have reacted to the surprise jump in inflation, which could force the Bank of England into an interest rate hike today.
Latest figures show that UK inflation rose to 10.4 per cent in the year to February – up from 10.1 per cent in January.
Vegetable and salad shortages along with alcohol costs in pubs and hospitality venues have driven the unexpected rise. But according to the ONS consumer price index figures, the increases in the cost of goods have been widespread.
Until February, inflation in the UK had fallen for three months in a row.
The rise is expected to have a crucial bearing on whether the Bank of England decides to increase, lower or hold interest rates when its Monetary Policy Committee meets to decide later today.
Many analysts anticipate the Bank will raise rates from 4 per cent to 4.25 per cent.
Staffordshire Chamber Chief Executive Sara Williams, pictured above, said: “These figures demonstrate that more needs to be done to provide support for businesses who are facing difficulties – particularly when it comes to energy costs.
“Most small businesses have used their cash reserves to get them this far and with jitters in the banking sector, access to money and advice is needed now more than ever.
“Obviously the Chamber will be here to support where we can, but the Government needs to step up and help.”
According to the British Chambers of Commerce’s most recent Quarterly Economic Forecast the inflation rate is forecast to ease to 5 per cent by Q4 2023.
But in the meantime, small firms still face a mountain of cost pressures that are stifling their ability to invest and grow.
David Bharier, Head of Research at the British Chambers of Commerce said: “The March budget saw little in the way of support for the unprecedented cost pressures businesses face.
“Relief can come in several forms – for instance, support to transition to more energy efficient sources and improving our trading relationships to ease supply chain difficulties.”
