Inflation is set to continue upwards, with a further rise in the energy price cap yet to come, leaving businesses with mounting economic uncertainty, alongside labour shortages.
Inflation is set to continue upwards, with a further rise in the energy price cap yet to come, leaving businesses with mounting economic uncertainty, alongside labour shortages.
The fall of 0.3% in April, following a 0.2% decrease in March, highlights the increasing stress the UK economy is under. All main sectors have seen a fall in growth, the first time since January 2021. This decline is the inevitable outcome of surging inflation, supply chain disruption and widespread skills shortages.
Quarterly economic growth is expected to grind to a halt this year before dipping briefly into negative territory as global events continue to weigh heavily on the UK economy.
The sheer scale of the cost-of living crisis facing the British public means the Government is absolutely right to provide additional support to those worst affected. For business, the toxic mix of inflation, raw material costs and supply chain disruption is the flip-side of the coin to the problems facing consumers. Unless steps are also taken to ease business costs, they will likely feed into the inflationary pressure on the economy and quickly eat into the financial support announced today.
Four out of five employers (81%) say they have been impacted by the increase in national insurance contributions Higher prices, reduced investment and increased staff costs were among the main effects cited
The jump in UK inflation in April is eye-watering and underscores the growing cost-of-living crisis facing households and the damaging squeeze on firms' ability to invest and operate at full capacity.
Markedly slower growth confirms an alarming loss of momentum for the UK economy in the first quarter, from a strong January outturn to a decline in output in March as surging inflation increasingly weighed on activity.
The British Chambers of Commerce is calling for an immediate emergency budget to deal with the costs crises facing businesses and people throughout the country. It has developed a three-point action plan that would allow firms to keep a lid on rising prices, boost productivity and ease cost pressures.
Higher interest rates will do little to address the global headwinds and supply constraints driving the inflationary surge. It also raises the risk of recession by damaging confidence and intensifying the financial squeeze on businesses and consumers.
The latest data confirms that the UK is in the midst of an unprecedented inflationary surge amid accelerating global price pressures, including from Russia’s invasion of Ukraine.
