Inflation remains the number one issue for Yorkshire businesses: Beckie Hart

Across boardrooms and households in every region of the UK, firms and families are struggling to keep up with rising costs, with many struggling to see how they can tighten belts any further.

Since the Covid-19 pandemic and the war in Ukraine, prices have skyrocketed.

Supply chain shocks post-lockdown and sanctions on Russian gas following its invasion of Ukraine pushed inflation to its highest rate in 30 years.

And businesses right here have been hit hard as their profits have been squeezed and overheads increased as they spend more on materials, products, and wages.

Households too have been under serious pressure in recent months.

In fact, research from NatWest and S&P Global shows that half of UK families have found it difficult to pay for groceries as well as higher gas and electricity prices over the past year.

The Government has shown it is listening.

At the start of the year, the Prime Minister pledged to halving inflation by the end of 2023, and alongside the Chancellor and the Bank of England has made significant progress in bringing inflation down.

Since peaking at 11.1 per cent last October, inflation has been on a slow downward trajectory, falling to 8.7 per cent in May.

Whilst it’s good to see progress overall, figures have plateaued in recent months and are still well above the Bank of England’s target of 2 per cent, with businesses and households struggling to cope with more months of rising costs.

So, what is being done to combat this stubborn inflation?

The Bank of England has acted and increased interest rates yet again to 5 per cent.

However, rising interest rates - while necessary to curb rising inflation - are creating their own challenges, making it difficult for firms to borrow money and households to pay their mortgages or get onto the housing ladder.

With firms already struggling to keep up with the rising cost of doing business, further price rises – alongside higher interest rates and a challenging economic environment - would put even more pressure on firms’ ability to keep staff and foster growth.

Businesses urgently need an environment that inspires confidence – confidence to invest, to innovate, and to boost the UK’s workforce.

It’s crucial the Government partners with firms across the UK to tackle those barriers currently holding us back from growing.

For example, by working together to make sure the UK’s business tax system is clear and consistent - one of the many opportunities we have to bolster the UK’s economic prosperity.

Our plan is to keep laser focused on the issues impacting business – and inflation, which shows no signs of abating anytime soon, is front of the queue.

Beckie Hart is regional director for the CBI in Yorkshire and Humber