Business advisor reacts as inflation drops for second month in a row

A business advisor is encouraging companies to tread carefully as inflation seems to be on the decrease.

Although it still remains at a 40-year high, the rate of inflation fell from 10.7 per cent in November to 10.5 per cent last month, according to the Office for National Statistics, which reports the data.

The decrease could be a sign that it has peaked sooner than expected, however, Colin Bielckus, a business advisor from Whiteley who runs The Outsourced Finance Director says that businesses should ‘tread carefully’ as prices are still seemingly rising in other areas.

While some costs are decreasing in certain industries, such as fuel and clothing prices, others are rising, such as coach and air fares, as well as food in shops, cafes and restaurants.

Colin said: ‘While this is a good sign, and I’m hopeful that we’re over the worst of it at least, it’s important that we still tread carefully as business owners to avoid making costly mistakes. We’re still around 8 per cent above the Bank of England’s target.

‘Now is the most important time to look at the markets, look at your costs and make sure you’re getting the best deal to set yourself up well as inflation, hopefully, continues to drop.’

He said that one of the main concerns he has heard has been labour shortages, but that apprenticeships could help with this.

Colin said: ‘Think about how you’ll survive against your competitors. Can you improve your marketing without investing a lot into it? Can you get good staff on board that you can train to a high standard to build a solid team?

‘The chances are, this won’t get better straight away – as we know the markets go up and down unpredictably – so it’s essential to keep the current mindset and ensure that your business will survive and be successful both in the current climate and as inflation eases.

‘Whether we’ll ever get back to one or two per cent inflation, I don’t know, but I am hopeful that it’s not getting worse than it has been.’