While the country may be out of recession and consumer confidence may have increased since last year, the fact remains that for many small business and company formation owners, market conditions remain tough.
This will not be helped by the fact that according to a report by the BCC inflation rose by 0.4% in March and the cost of living has risen accordingly. This is a consequence of the spiraling cost of petrol, January’s VAT increase and the fact that wages are no longer being increased in line with inflation.
As the small business sector waits for the impact this will have on consumer spending we ask a leading economist about the impact of inflation and a small business owner what he expects for the future of his company:
Economist Philip Smithfield, comments on the rise of cost of living and the impact it will have on the company formation sector; “As Britain teetered out of recession many people felt that the worst was over, we had come out of the worst economic downturns of modern year and no we could begin to rebuild our economy. Wrong. Small businesses and companies which had recently been formed still had to deal with rock bottom consumer confidence and at increase in VAT.”
James Leah, founder of the ‘JLB’ chain of retail outlets, comments; “This Christmas was the worst one we have ever experienced and then came January’s ‘Big Freeze’ and the increased VAT rate which compounded the situation even further. It comes as no surprise to me that inflation has increased but what we need now is clear plans from all three political parties as to how they plan decrease it.”