The Consumer Prices Index (CPI) remains above the Government’s 2 percent target.
The CPI is a measure that examines the weighted average of prices of a basket of consumer goods and services. Its 12-month rate rose to 2.9 percent in May 2017, up from 2.7 percent in April, reported the Office for National Statistics (ONS).
The rate has been increasing following a period of relatively low inflation in 2015. It is now at its highest since April 2012.
Responding to the announcement, Mike Cherry, National Chairman at the Federation of Small Businesses (FSB), said:
“Operating costs for small firms are now at their highest in four years. Small business owners and their staff are having to personally absorb these hikes and have less and less room to invest for growth. Support is urgently needed.
“Many small businesses are still reeling from the business rates revaluation that took effect in April. The announcement at the Spring Budget of a £300 million hardship fund to help firms worst affected left many feeling hopeful. But we’re yet to see that funding materialise, while many local authorities have chased down small businesses to pay incorrect, over-inflated bills. The Communities Secretary needs to get a grip and ensure this proposed support reaches those who need it most in his first days reappointed to the job.
“Our members are also under pressure from spiralling employment and utility costs. An increase in the Employment Allowance to £4,000 is long overdue. A freeze on fuel duty and Insurance Premium Tax (IPT) would also go some way to relieving the inflationary pressure that has been squeezing small businesses for months now.
“With all these cost pressures, now is certainly not the time to revisit the Government’s failed proposal to hike national insurance rates on the UK’s 4.8 million self-employed.”