With CPI standing at 4.0%, up from 3.9% in November, small businesses are hoping for a fall in interest rates soon.
Commenting on the news, Martin McTague, National Chair of the Federation of Small Businesses (FSB), said, “Seeing inflation inch up marks a disappointing start to 2024. It was a challenging end to last year, and now businesses are bracing themselves for more difficulties that lie ahead.
“The lowering of the consumer energy price cap last October provided a temporary respite for householders. Importantly, business tariffs fall outside this cap, leaving many battling with heightened utility bills.”
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Martin added, “Raising the Employment Allowance to tackle the bite of rising labour costs and increasing the VAT threshold to £100,000 to increase business potential could both be momentous steps forward. Similarly, rolling out tax-free shopping could reel in international visitors.
“The Bank of England should take care not to leave interest rates too high for too long, as high rates drive up the cost of business debt, adding further to the pressures faced by small businesses.”
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