September inflation means retail faces extra £140m burden
Responding to the latest CPI inflation figures, which show headline inflation falling to 1.7% and food inflation rising 0.6 percentage points to 1.9%, Kris Hamer, director of insight of the British Retail Consortium, said: “Inflation was down on August, dropping below the Bank of England’s 2% target for the first time in over three years. This was driven by lower energy costs, as well as easing inflation of clothing & footwear. While food inflation edged up slightly due to poorer harvests, prices of some sweeter items including chocolate and sugar fell in price on the month. With Ofgem’s lifting of the energy price cap at the start of the month, October’s figure (published next month) will reveal an inflation rate closer to the 3% mark, dampening real wage growth over the all-important Golden Quarter.
“The September CPI will determine next April’s increase to business rates, meaning the industry faces paying an extra £140m. For too long, the gradual increases to business rates have been contributing to the decline of our high streets and town centres, damaging investment and preventing the creation of new shops and jobs. This effect could be compounded if other business taxes are increased at the Budget. The chancellor should introduce a Retail Rates Corrector – a 20% downward adjustment in business rates paid on all retail premises – to redress the imbalance that sees retailers paying a higher proportion of their profits in taxes of almost any industry.”
