Responding to the news that CPI stood at 6.7% in the year to August 2023, down from 6.8% in July, Martin McTague, National Chair of the Federation of Small Businesses (FSB) said:
“It’s fair to say small firms will be relieved there wasn’t a rise in inflation, as some had predicted, but this result is far from the substantial fall they were hoping for.
“The core inflation drop is good news, although the fact that fuel contributed the most on the upward side to inflation is a concern. If pump prices rise further, this will have knock-on effects to almost all sectors.
“With signs that interest rate rises are starting to bite, tomorrow’s base rate decision by the Bank of England has to be the peak for rates, one way or another. Leaving rates high for longer than needed will devastate the chances of an economic recovery.
“Small firms are living with the effects of inflation that has been far higher than the target for many months now, so today’s inflation results aren’t enough alone to remove their worries about the economic situation, especially given the fall in GDP announced last week.
“Around one in ten small businesses say they are at least at moderate risk of insolvency, twice the rate of large companies, and risks abound, from higher debt repayments to lower levels of consumer spending.
“The Government should commit to measures to help small firms in the Autumn Statement – they are the ones who will put economic growth back on an upward path, if given the right conditions.
“Decisive action to end late payments once and for all is a necessary step. Allowing large corporates to force their small suppliers to offer them free credit is scandalous and must become unacceptable in the eyes of regulators and the law.
“We also want to see an overhaul of business rates, and an extension of the current discount for retail, hospitality and leisure businesses beyond next April. Raising the VAT threshold to £100,000 would be another way to unleash the potential of many small businesses, helping to stimulate the economy.”
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About FSB
As the UK’s largest business support group, FSB is the voice of the UK’s small businesses and the self-employed. Established over 40 years ago to help its members succeed in business, FSB is a non-profit making and non-party political organisation that’s led by its members, for its members. As the UK’s leading business campaigner, FSB is focused on delivering change which supports smaller businesses to grow and succeed.
FSB offers members a wide range of vital business services, including access to finance, business banking, legal advice and support along with a powerful voice in Government. Each year FSB also runs the UK’s Celebrating Small Business Awards. More information is available at www.fsb.org.uk. You can follow us on twitter @fsb_policy and on Instagram @fsb_uk.