Small businesses across the South West hit by the rising cost of living crisis have urged the Government to provide more support, with many fearing they could go bust.
Inflation rose to a 40-year high on Wednesday (June 22), with the rate of rising consumer goods prices up from 9% in April to 9.1% in May.
Economists at the Office for National Statistics said the increase was driven by record high petrol prices and steep food price rises.
It comes as energy bills rose by 54% for the average household at the beginning of April and will remain at this level until October. Forecasts released this week predict that the Government cap on energy bills could rise again from an already record high £1,971 to £2,980 in the autumn.
The Bank of England has predicted that inflation will spike at more than 11% in October after the price cap is changed again.
Monique Oliver, who owns an art and design studio in the Forest of Dean in Gloucestershire, said inflation had been “battering” her business, and warned this could be her last year of trading unless “things turn a corner soon”.
Ms Oliver said: “For the past two years, I've been hanging onto my business by my fingernails and it's emotionally draining, and now we have inflation at 9.1% and expected to go into double digits. I genuinely fear for the future.”
Dave Kelly, co-founder of Bristol-based butcher, Ruby & White said its fuel costs for deliveries and collections was “borderline obscene”.
He added “phenomenal increases” in feed and fertiliser meant it was getting a lot more expensive to put meat on the counter, but the business was trying to take the hit for its customers.
Mr Kelly said: “Fortunately, sales for us are still holding up for now as a cut of meat from a butcher and a bottle of wine from the supermarket are still significantly cheaper than eating out in a restaurant.
“Companies in all sectors are being put through the grinder and the Government is doing nowhere near enough. The UK economy is on red alert.”
Former professional rugby player Ollie Hayes, who now runs personal trainer business So Fit Bath, also criticised the Government and Bank of England’s response, accusing them of “watching from the stands”.
Mr Hayes said: “For millions of small businesses, it’s more brutal now than it was during the pandemic but policymakers and the people running this country are all out of ideas. The economy is entering a dark place.”
Bristol-founded vintage clothes business Ashwell & Co said its has seen a "drastic drop" in sales over the past month, with founder Kate Ashwell saying the cost of living crisis was "destroying" her company.
Ms Ashwell urged the Government to do more to help firms like hers suffering from the squeeze on household spending, warning many “won’t make it through".
Ms Ashwell said: “Having fought our way through the pandemic, it’s incredibly deflating. We are absolutely exhausted and our emotional and financial resources are low.
“The financial crisis we’re in is yet another thing small businesses are having to face, but this time there is no help from the Government. The current situation is potentially far more damaging, longer term for our business.”
Self-employed jewellery designer Zaleika Bratchley from Cornwall said many of the materials she needed to make my products - along with packaging, postage and promotional costs - had “shot up” in price.
Ms Bratchley added: “This means a choice between raising my prices and possibly pricing myself out of the market or swallowing the costs and making less profit. If the cost of living keeps rising and wages don't keep up, I don't know how much longer I will be able to operate as a small business."
Chancellor Rishi Suank said the Government and the Bank of England were acting to combat rising inflation.
Mr Sunak said: “I want people to be reassured that we have all the tools we need and the determination to reduce inflation and to bring it back down.
“Firstly, the Bank of England will act forcefully to combat inflation. Secondly, the Government will be responsible with borrowing and debt so we don’t make the situation worse and drive up people’s mortgage rates any more than they are going to go up.
“Lastly, we are improving the productivity of our economy, improving the supply of energy we have and moving people off welfare and into work.”
Ed Rimmer, chief executive of Bath-based Time Finance said the Autumn Statement was “too far away” for the Government to act for many SMEs whose current outgoings “far outweigh” their income.
Mr Rimmer said: “The Government simply isn’t doing enough. In our most recent survey, businesses said they were impacted most by the rising cost of supplier materials and stock, and energy costs. Both will be made worse by the rising rate of inflation and both pose a great threat to our economic productivity.”
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