Commenting on the beginning of the 2022/23 financial year, East Midlands Chamber chief executive Scott Knowles said: “Companies across the East Midlands will wake up today knowing the cost of doing business has increased significantly overnight.
“The energy price cap rise sends overheads skyrocketing, which affects every business but particularly those in energy-intensive industries that are prevalent in the East Midlands, such as manufacturing and engineering.
“These sectors are already enduring huge challenges with price rises for raw materials, staff and other overheads – indeed, two-thirds (66%) of our region’s businesses told us they are concerned about price pressures in our Quarterly Economic Survey for Q1 2022.
“On top of this, galloping inflation is leaving businesses with no alternative but to pass on extra costs to customers. The terrible events in Ukraine mean there is significant uncertainty about when these trends will top out.
“For the hospitality and tourism sector, which is still just clawing back the income losses incurred during lockdowns over the past two years, restoring the 20% VAT rate comes at a very bad time. While many businesses will of course have factored this into budgets, it’s an increased burden at a time when its customers and employees will also be facing rising living costs.
“With the national insurance increase also kicking in next week, it feels like a perfect storm is brewing to fuel the cost of doing business crisis that is becoming very real for so many firms. Ultimately this affects their ability to invest, grow and create new jobs.”
