Increases in Inflation means rising costs for businesses

11 months, 1 week ago by Oliver Atkinson

The Office For National Statistics recently reported that the Consumer Price Index (CPI) rose by 5.4% for the year ending December 2021, up from 5.1% in November 2021.

This means that the prices we pay for everyday items continues to increase as does the pressure on businesses’ costs.

The price of petrol increased by 28% from the previous year from 114.10 pence per litre in 2020 to 145.80 pence per litre in 2021. According to The Office for National Statistics “The largest upward contribution” came from food and non-alcoholic beverages which saw the fastest rise since 2008. Increases in food prices will mean higher direct costs for restaurants.

Continued increases in the wholesale price of gas are adding further fuel to the fire of inflation with the energy cap expected to be raised to £2,225 a year for an average household despite having just recently been raised in April of 2021.

The upward trend shows no sign of slowing with inflation now expected to reach 7% by April.

This is likely to translate to increases in the prices of goods and services provided by businesses as they seek to cut costs or pass the costs on to their customers.

Calls for The Bank of England to raise interest rates in order to reduce inflation have so far been ignored.