The UK’s inflation rate as measured by the Consumer Prices Index (CPI) rose to 2.9% in May, up from 2.7% in April, data published by the Office for National Statistics (ONS) has revealed.
The rising costs of package holidays and imported computer games helped to push the rate to its current level. The ONS found that food and clothing prices also rose, but fuel prices fell.
Economists had previously predicted that the rate of inflation would remain at 2.7% in May.
Suren Thiru, Head of Economics at the British Chambers of Commerce (BCC), commented: ‘Higher inflation is a key business concern as it squeezes margins and weakens their ability to invest, particularly during this time of heightened political uncertainty.
‘A key focus of the new government must therefore be on easing the current pressure on firms’ cost base by tackling the burden of upfront costs and taxes associated with doing business in the UK.’
Meanwhile, the Trades Union Congress (TUC) expressed concerns that the UK’s rising inflation rate ‘continues to far outstrip wage growth’.
Frances O’Grady, General Secretary of the TUC, warned: ‘The election showed that working people are struggling. The new government must stop the real wage slide. Ministers must focus on delivering better-paid jobs all around the UK.’
The Confederation of British Industry (CBI) has called for the next government to set up a ‘business Brexit taskforce’ in the 50 days following the General Election.
Business has the ‘evidence, ideas and solutions’ to help the UK gain an advantageous deal from Brexit negotiations, the CBI stated. It also suggested that a business Brexit taskforce would help solve the most complex Brexit issues.
The business group claims that such a taskforce would help the next government to garner information about what businesses require from Brexit.
This information, it said, would serve as a compass for the next government to use in order to navigate through the details of the negotiations. Businesses would, in turn, get reassurance that the government is listening to their concerns.
However, the CBI also warned of the ‘dangers of the next government going it alone’. It stated that business needs a say in Brexit negotiations, because ‘even when the politics have been forgotten, we’ll have to live with the effects for decades to come’.
Paul Drechsler, President of the CBI, said: ‘At this time of unprecedented challenge, we need unparalleled co-operation between companies and the next government.
‘My message to the next government, whoever they may be, is you don’t need to ‘wing it’.
‘If you work with us, Britain will get a better deal.’
A new report by the Federation of Small Businesses (FSB) has found that the small business sector in England has the potential to double the number of apprentices it takes on to well over two million.
The study found that one in four FSB members already employ an apprentice, but a further quarter would consider taking one on in the future.
The FSB claims that, if this accurately reflects the situation of the rest of England’s 4.7 million small firms, there is potential to deliver over a million new apprenticeships with smaller employers, but only with the correct Government approach to incentives and support.
The Government has a target of reaching three million new apprentices by 2020, but the FSB claims that this is a ‘make-or-break’ moment for the ambition.
Mike Cherry, National Chairman of the FSB, said: ‘Smaller businesses are taking on more apprentices than ever before. What’s more, a quarter of our members say they are considering employing an apprentice in the future. This presents a huge opportunity and is great news for vocational training, which has become an increasingly attractive option for young people put off by the rising cost and uncertain returns of a university degree.
‘We are at a make-or-break moment. We need the Government to hit the right balance between incentives and support. While many small firms are committed to apprenticeships, many more continue to be worried about the time and personal commitment required.’
Other findings in the study include evidence that small businesses are most likely to recruit apprentices from outside the business, with 79% of FSB members recruiting externally, and that apprenticeships in two thirds of small businesses lead to longer-term employment once training is complete.
Businesses call on Government to reconsider National Living Wage targets – Article Gerrards Cross : Nunn Hayward
Business groups, including the Federation of Small Businesses (FSB), have written to the new Business Secretary, Greg Clark, calling for National Living Wage (NLW) targets to be reconsidered in light of the economic uncertainty generated by the UK’s vote to leave the EU.Introduced in April, the NLW requires employers to pay employees aged 25 and over at least £7.20 an hour.
The NLW is aimed at ensuring that over 25s earn a minimum of 60% of median earnings by 2020. The Government predicts that the NLW rate could potentially rise to over £9 an hour by this time.
However, the 16 trade associations, including the British Hospitality Association and the National Farmers Union, have called on the Government to moderate increases.
Their letter revealed that member companies are having to revise growth, investment and employment plans ahead of the predicted NLW increases.
The business groups also stated: ‘We recommend the Government restores the Low Pay Commission’s powers to objectively assess the impact of the wage increases on businesses, and recommend future living wage and minimum wage rates with regard to their impact on employment opportunities.’
In response to the letter, an official spokesperson for Prime Minister Theresa May stated: ‘The Prime Minister has been clear that we have to build an economy that works for everyone, where people are able to share in the benefits of economic growth.
‘Making sure that people can earn a decent day’s wage is a big part of that.’
Conor D’Arcy, policy analyst at the Resolution Foundation, also commented: ‘By sensibly pegging the NLW to typical earnings, the Government has already built in flexibility to help steer it through choppy economic times.’
Business groups have called on the Government to help stabilise the UK economy in the wake of Britain’s historic decision to leave the European Union. Following the referendum result, the business community has said it now wants to see decisive action to calm the markets and provide clarity and reassurance to the millions of businesses throughout the UK.
Also this month, Citizens Advice has warned of possible high exit fees for individuals making use of pension freedoms. A survey conducted by the organisation revealed that those withdrawing money from their pension pot may be subject to a 10% loss of their retirement funds.
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To read this edition of Broadcast click here NHBROADCAST_ISSUE 10 July 2016
Congestion, poorly maintained local roads, and a lack of regional strategic planning are all combining to hinder economic growth in rural areas, according to a study by the Federation of Small Businesses (FSB).
The report, entitled ‘Going the extra mile: Connecting businesses and rural communities’, found that small businesses are overwhelmingly reliant on roads, with nine in 10 firms (89%) placing high value on the network, especially in rural areas with little or no access to public transport.
However, half of all small firms think the UK’s roads and public transport system have deteriorated in recent years, while only one in 10 small business owners thought roads and public transport had got better.
The top three issues reported by businesses based in rural areas were: congestion on local roads, potholes and the cost of fuel.
In its report, the FSB calls on the Government to use current and future devolution deals to directly address these issues and to commit to greater investment in local transport infrastructure.
Mike Cherry, FSB National Chairman, said: ‘The Government is investing in transport – but the lion’s share goes to big flagship projects on the strategic road network. Most small businesses mainly rely on their local roads and public transport, so there is a strong case to prioritise investment in these smaller projects which will help to alleviate congestion and bottlenecks.
‘The current devolution agenda in England presents a real opportunity to make a positive difference to rural communities. Small businesses want to see more resources earmarked for rural transport. This will help support rural small businesses as well as the UK tourism industry, which are both disproportionately affected when local bus networks and roads are left to deteriorate.’
The FSB also called for the Government to keep fuel costs down by maintaining its commitment to freeze the duty escalator through to the end of this Parliament.
The Government’s new ‘sugar tax’ could impose an ‘arbitrary burden’ on many families, the Taxpayers’ Alliance (TPA) has warned.
The sugar tax, announced in the 2016 Budget, will be introduced during 2018, and is intended to help reduce childhood obesity.
However, the TPA’s research has suggested that the tax does not take into account the sugar content of products: it found that some coffee shop beverages contained more sugar than popular fizzy drinks.
These coffee shop drinks are not subject to the sugar tax, despite their high sugar content – however, many fizzy drinks, with lower sugar contents than those drinks served in coffee shops, are.
In addition, of the 49 drinks analysed, the TPA found that the ten with the highest amounts of sugar will not be taxed.
Fizzy drinks will be subject to the tax, but drinks such as pure fruit juices and milk-based products will be excluded.
Jonathan Isaby, TPA chief executive, commented: ‘The evidence shows that the sugar tax has nothing to do with the sugar content of products, so it is farcical to suggest that this will have any positive impact on people’s diet or lifestyle choices’.
However, a Treasury spokesperson stated: ‘The levy will be charged on soft drinks because they are the main source of added sugar in children’s and teenagers’ diets, many with no intrinsic nutritional value’.