Chamber: Energy price cap rise heaps further pressure on cost of doing business

The Chief Executive of the East Midlands Chamber has commented on the energy price cap rise, announced on 3rd February, as well as interest rates being raised to 0.5%.

Scott Knowles said: “Raising the energy price cap may have felt like an inevitable move but for businesses, it’s another huge costly blow that will ultimately be felt by their employees and consumers too.

“The spiralling cost of doing business is increasingly looking unsustainable, with energy prices adding to the anxiety around rising material and staffing costs. In our Quarterly Economic Survey, the proportion of East Midlands businesses that were concerned about future price rises grew from 46% in Q3 2021 to 62% in Q4 2021.

“Inflation isn’t a problem that will go away, with the British Chambers of Commerce forecasting inflation to push well above 6% by April – putting businesses under mounting pressure to continue raising prices. 

“While some of these are a result of global pressures, the looming national insurance hike for many firms may be one additional cost too many in this escalating crisis in the cost of doing business – but one that remains avoidable should the Treasury finally make a U-turn despite saying this won’t happen.

“The result of this is it will affect the ability of businesses to create jobs and wealth locally, as well as increase wages for their employees, who will bear the brunt of the rising cost of living at home. 

“Raising interest rates to 0.5% was expected to combat inflation but will also affect the ability of the private sector to make productivity gains by investing in new plant and machinery.

“Make no mistake about it, we’re at a knife edge in the economic recovery and it’s crucial the Government does all it can to ensure it doesn’t place any additional costs on businesses and individuals for the remainder of this Parliament.”