Firms can 't afford to wait for help as inflation hits double figures - Chamber

The government must urgently bring forward measures to ease pressure on businesses after Britain 's rate of inflation surged to a fresh 40-year high, business leaders said today.

The Consumer Prices Index (CPI) rose to 10.1 per cent in the 12 months to July, up from 9.4 per cent in June and remaining at the highest level since February 1982, according to the Office for National Statistics (ONS).

The ONS said increased food costs were the biggest driver to the latest hike, with annual inflation for these items now running at 12.7 per cent, up from 9.8 per cent in June, fuelled largely by price rises for basics such as bread, milk, cheese and eggs.

While a new Prime Minister isn 't likely to be installed until 5 September, Greater Birmingham Chambers of Commerce said businesses cannot afford to wait that long for fiscal intervention.

And the GBCC has called for a series of measures to be brought forward, including an energy price cap for SMEs, the removal of VAT from energy bills for small businesses and a VAT relief extension for those in the hospitality sector.

Erin Henwood (pictured), policy advisor at Greater Birmingham Chambers of Commerce, said: “With the Bank of England delivering its biggest interest rate rise in 27 years just two weeks ago, it comes as little surprise that inflation has today hit a new 40-year high of 10.1 per cent.

“High energy and commodity prices, global supply bottlenecks and strong labour markets were all listed as factors contributing to rising levels of inflation and a deteriorating outlook for the global economy.

“Indeed, the UK is now projected to enter recession from Q4 2022, whereby inflation is also expected to surpass 13 per cent.

“Businesses across the country cannot afford to wait another three weeks until a new Prime Minister is in place to see any action taken.

“As well as urgent fiscal intervention to help keep businesses afloat, it is vital we see measures such as the introduction of an energy price cap for small businesses, the removal of VAT from energy bills for small businesses, and the extension of VAT relief for hospitality firms. ”