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UK inflation: Scaling back of energy support risks renewed inflation surge, ICAEW says

Author: ICAEW

Published: 19 Oct 2022

Responding to the UK inflation figures for September 2022, released by the Office for National Statistics today (Wednesday 19 October 2022), Suren Thiru, Economics Director for ICAEW, said:

“The return to double-digit inflation underscores the devastating financial squeeze facing households and businesses.

“September’s uptick should be followed by a notable leap in inflation in October as energy bill increases push inflation to around 11%, albeit lower than it would have been without the Energy Price Guarantee.

“The Chancellor’s decision to scale back energy support from April 2023 risks fuelling a renewed inflationary spike, which may deepen the recession by further eroding incomes and forcing more aggressive interest rate rises.”

On the impact of September’s CPI inflation rate on firms' business rates bills in the next financial year, Suren added:

“Many firms are facing eye-watering tax rises next April as business rates rise with September’s CPI inflation, aggravating already diminished cashflows. This is particularly acute for those in retail, leisure, and hospitality, whose temporary 50% rates relief expires in the same month.”