The Chief Executive of the East Midlands Chamber has commented on ONS inflation figures which show that the Consumer Price Index rose to 10.1% in September 2022.
Scott Knowles said: “Inflation is back up at a 40-year high with little sign the pressure will ease any time soon. Our research shows clearly this is a significant barrier to the growth prospects of many East Midlands firms as they struggle not to pass on costs and remain competitive, with business confidence on profitability and turnover down by 21% and 17% between the second and third quarters of 2022.
“Producer Price Inflation, running at 20%, remains near record highs, and shows the scale of input price rises that businesses are having to absorb. This is obviously unsustainable as a net 58% of our region’s companies expect they will be forced to raise prices over the coming year as they grapple with increasing costs for utilities, people, raw materials and fuel.
“With the Bank of England set to raise interest rates even further in the coming weeks, businesses now find themselves caught in a pincer movement between rising input and borrowing costs.
“The economy has stagnated and with the Chancellor signalling that energy bill support may not go beyond six months, along with reversing other tax reduction measures benefitting businesses, the outlook is currently challenging for many firms.
“As well as the need for restoring certainty to what lies ahead in order to create confidence, it’s critical that Government listens to the business community to understand the extent of the problems piling up at firms’ doors.
“Businesses will need to see a clear long-term economic plan to provide a stable environment to invest and plug glaring labour shortages, alongside specific measures that relieve unprecedented inflationary pressures.”