Shropshire business chiefs reflect on ‘stubbornly high’ rate of inflation

Ruth Ross, Shropshire Chamber’s chief executive, said: “The spiralling rate of inflation is devastating for many of our small businesses which are struggling to absorb the ongoing price rises.

“But at the same time, we must recognise that a continued rise in the base rate can have serious negative effects too, particularly for companies which may be looking to borrow money to manage their cashflow problems.

“We cannot escape the fact that the combination of high interest rates and high inflation is the worst of both worlds for some small firms.”

The Chamber’s latest quarterly economic survey found that rising interest rates are of particular concern to the hospitality sector, which employs thousands of staff across Shropshire.

Ruth said: “We support the views expressed by the British Chambers of Commerce, which is calling on the Government to consider further action to break this vicious cycle by boosting economic growth through investment in infrastructure, skills training, and global trade.”

Paul Butterworth, Interim CEO, at Chambers Wales South East, South West and Mid, said: “Interest rates are at a 15-year peak. This will continue to have implications on borrowing costs for businesses who require access to finance who are struggling to absorb continued price rises.

“Welsh businesses are currently having to contend with record high inflation and energy costs as well as contending with skills shortages. The UK Government has scaled back support, with the end of the super deduction and EBRS schemes at the end of March.

“The Prime Minister stated that one of his main priorities was to halve inflation; we see this as a priority to support economic growth. The fall in inflation that was expected in March and April but did not materialise is holding companies back and therefore it is understandable that the Bank of England needed to make this decision to stabilise the economy.

“However, this will be a cold comfort for businesses. With costs still increasing, 60% of Welsh businesses are expecting to have to raise prices in the next three months and many have stated that they intend to increase prices for the fifth quarter in a row. This cycle is not sustainable for Welsh businesses after facing already unprecedented challenges.

“Chambers Wales South East, South West and Mid and the British Chamber of Commerce are calling on the UK Government to take action to relieve the pressure on businesses by tackling skills training, boosting international trade and investing in infrastructure.”