High Street decorated with British Union Jack buntings in Penistone, England. The End Fuel Poverty Coalition has warned that a tsunami of fuel shortages will hit the country this winter.
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LONDON — Small businesses across the UK are struggling to make ends meet as they face high energy prices, rising costs and a rapidly declining consumer purchasing power.
Britain’s inflation jumped to a 40-year high of 10.1% in July, according to new data on Wednesday, exacerbating the country’s cost of living crisis as food and energy costs continue to rise.
The Bank of England expects consumer price inflation to plateau at 13.3% in October, while average national energy prices (set at cap prices) rose sharply in the fourth quarter and eventually reached is expected to exceed £4,266 ($5,170) annually. 2023.
On Wednesday, the board of the UK energy regulator Ofgem resigned from its decision to add hundreds of pounds to household costs, arguing that the watchdog would seek “the right balance between the interests of consumers and those of suppliers”. I criticized him for not taking it.
UK real wages fell by 3% annually in the second quarter of 2022. It was the steepest decline on record as wages did not keep pace with the sharp rise in the cost of living.
A new survey released on Friday also showed consumer confidence had fallen to its lowest level since records began in 1974.
“absolute madness”
Alan Thomas, UK CEO of insurance company Simply Business, said:
“At the same time, consumers’ purchasing power is declining as Britons cut non-essential spending and hurt the books of small businesses. [small and medium-sized enterprise] owner. “
This assessment was echoed by Christopher Gammon, e-commerce manager for Lynx Aquatics, a Lincolnshire-based store and warehouse offering aquariums, ponds and marine livestock.
The company’s energy costs have risen 90% so far since the war in Ukraine began, Gammon told CNBC on Thursday.
“We’re addressing rising costs by switching everything to LED, solar panels, wind turbines (planned), and shutting down unused systems,” Gammon said.
“We also had to raise the price of our products. Most of these are livestock and now cost more to care for.”
Customers have stopped keeping fish and reptiles due to maintenance costs, and on Wednesday a customer brought in a snake he could no longer afford to care for.
Rising costs forced Links Aquatics to close its East Yorkshire store, laying off several employees while giving the two remaining employees in Lincolnshire a pay rise to weather the crisis. tried to provide
We are also working to expand our online shop as maintenance costs in stores are rising as the cost of heating marine aquarium water and purchasing pumping equipment is getting higher and higher. is.
A quarterly survey conducted by the British Chamber of Commerce in early July found that 82% of UK businesses said they would It turns out that they view inflation as a growing concern for their own business.
BCC Research Director David Bharier said:
“The ongoing supply chain crisis, exacerbated by the conflict in Ukraine and the lockdown in China, is compounding this.”
BCC Executive Director Shevaun Havilland added that almost all indicators have deteriorated since the March survey, adding that “the red lights on the economic dashboard are starting to flash.”
Phil Speed is an independent distributor for Utility Warehouse, a multi-service company based in Skegness, UK, working with intermediaries to find energy deals for business clients.
He told CNBC earlier this week that for the first time in a decade he couldn’t get a better deal for a customer than an out-of-contract rate. contracted transaction.
“I think the unit price she was quoting was sixty pence. [pence] Ridiculous gas units. A year ago I think it was five or sixpence. It’s sheer insanity,” Speed said.
“You never know what’s going to happen because you never know what’s going to happen. Prices are just going ballistic. Nobody’s going to buy it.”
Gas costs for both businesses and consumers are only expected to rise during the cold winter months. Speed said that unless gas appliances can be replaced with electric ones, local cafes that cook on gas will likely struggle as they will have no choice but to stick with gas.
“Scream at someone”
Rail strikes have already brought the country to a standstill for days over the summer and look set to continue, but postal workers, telecoms technicians and dock workers are all on strike as inflation erodes real wages. I voted.
Conservative leader candidate Liz Truss earlier this month was forced to make a dramatic turnaround from plans to cut salaries in the public sector outside London, with similar cuts for teachers, nurses, police and the military. was done.
Local authorities recently proposed a flat salary increase of £1,925 per year for public school support staff.
A Lincolnshire public school support staff member in her early 50s, who requested anonymity due to the sensitivity of the situation and fear of official retaliation, told CNBC. She is a public sector paid worker struggling to earn an income.
In 2010, the UK government announced a two-year wage freeze for public sector workers in the aftermath of the global financial crisis, followed by an average of 1% of public sector wages, which was lifted in 2017. The cap was announced, and the increase in average wages accelerated. about 2% by 2020.
A 10.5% increase in the minimum wage for school support staff would ease the pressure, but her utility bills would double and her private landlord tried to raise her rent by £40 a month, to which she agreed. I didn’t. You may need to sell your car to cover basic living expenses.
She told the government that a “standing charge” is a temporary reduction in the fixed amount that households have to pay most gas and electricity bills no matter how much they actually use, and a one-time “windfall.” He called for intensifying efforts to collect the tax. From energy companies like BP, Shell and Centrica, she has reported record profits..
“I think this is a bigger crisis [the Covid-19 pandemic]I don’t see how we can afford these kinds of energy costs, as this can affect not only low-income people, but also middle-income people,” she said.
Concerns about entrenched inflation are growing as companies and governments are put under pressure to raise wages in the face of rising costs of living.
“It’s okay to say, ‘We can’t keep raising people’s salaries. It makes the cost of living worse,’ but the cost of living is already out of control and the only way people can survive is with higher wages. said the woman.
“I know it’s a catch-22, but I really don’t know how to avoid it. You have to eat.”
The situation in recent months is already starting to take its toll, even before the expected deterioration of the energy crisis.
“I consider myself a very honest and hardworking person. I have never committed a crime and have always done the right thing, but now I am starting to feel like I am going nowhere in this country. I will,” she said.
“For the first time in my life, I want to go out and march in protest and shout very loudly at someone.
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