Reacting to the latest ONS inflation figures, Paul Butterworth, CEO, at Chambers Wales South East, South West and Mid, said:
“Today’s published CPI rate of inflation remains at 8.7% and whilst being brought under 10%, this sustained high inflation continues to hurt the Welsh economy and Welsh businesses.
“As the cost of living rises, associated expenses in raw materials, production and distribution costs also escalate, directly affecting the profitability of businesses that are already operating on narrow profit margins which in turn decreases consumer confidence, business confidence and ultimately investment. Uncertainty about future prices and the stability of the economy makes businesses hesitant to make long-term decisions.
“This reluctance to invest can hinder business expansion, innovation, skills and job creation, impacting the overall economic growth of Wales. Welsh businesses will be keeping an eye on interest rates, currently sitting at 4.5% and expected to rise. While this may not be a terminal problem for many Welsh businesses, reduced inflation rates and interest rates are essential for allowing Welsh businesses to thrive long-term.”
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