Business leaders have warned that inflation remains the biggest threat to companies despite latest UK figures suggesting it has peaked.
Figures for November show that the rate of price rises had slowed – with inflation down to 10.7 per cent last month from 11.1 per cent in October.
The drop is believed to be due to falling petrol prices but was offset by price rises for alcohol in the hospitality sector. Analysts believe the lower figure indicates that inflation has peaked and will continue to slow down over the coming months.
However, the business community has made it clear that the difficulties are far from over and that strong Government action is needed to create the right environment to create growth or, in many cases, to help keep companies afloat.
Staffordshire Chambers of Commerce Chief Executive Sara Williams said: “Despite indications that we have passed the peak, inflation remains by far and away the number one concern for business. Even with a slowing rate of inflation, damage to business confidence has been very significant.
“Politicians and policy planners need to understand how close many businesses are to being permanently damaged or closing because of the difficulties they are facing.
“We are also in a situation where banks are closing in on loans and businesses are struggling to access finance – even if they have good order books.
“So, we really need to see strong action from Government on infrastructure skills, trade and green tech to help create the right environment to invest.
“And, importantly, we also need the Government to decide about what they are doing for business energy issues from April 2023 – because businesses need to plan for the future.”
The latest figures released by the Office for National Statistics (ONS) showed that, despite the overall slowdown, food prices continued to rise. Annual food inflation hit 16.5 per cent – the highest rate for 45 years – up from 16.4 per cent in October.
The price of drinking alcohol in pubs, restaurants and cafes rose between October and November – compared to 12 months ago when there was a fall in the same period.
The biggest price rise was for whisky, up 7.8 per cent in the month, while gin, draught premium lager, draught bitter and wine were up by 1.2-1.7 per cent a glass.
UK Hospitality Chief Executive Kate Nicholls said: “While the headline rate of inflation has reduced slightly, it remains the case that hospitality businesses are seeing intense inflation in every aspect of their operations. In particular, energy, food and drink costs continue to rise and will be taking up a significant proportion of business spend.
“These levels of inflation will not disappear overnight and businesses are doing everything they can to keep costs down, but they need certainty on the future of the Government’s energy support scheme beyond March. “It’s crucial that the hospitality sector is included in future energy support to help businesses survive and ensure they can keep prices down for customers.”