Inflation Steady, Adding To Cash Flow Pressure

14th February 2018.

Inflation remained unchanged at 3 percent last month putting further pressure on the Bank of England for an interest rate rise. Such a rise in interest rates will have an impact on businesses who rely on credit or business loans for funding.

Economists had expected inflation to fall more towards the Bank’s target of 2 percent, but the high demand for expensive family excursions such as zoos and gardens kept prices steady. Prices have been pushed higher since the Brexit referendum back in 2016, and have kept a strong grip on household incomes as a result. A rise in interest rates will add to this pressure by increasing lending fees as well as credit. This could have a positive effect on household debt, as consumers are forced to buy only what they can afford.

Here at the Credit Protection Association, we recently wrote a blog concerning the certainty of a rate rise, and with inflation steady, this looks more likely. We have many members who will see an impact from a rise, but we insist they aren’t discouraged from pursuing funding. CPA offers a debt recovery service that will revive cash flow and allow the business to expand, all while avoiding the damage, and the fees, that borrowing can incur.

Inflationary pressure has tightened its hold on households, and these latest figures highlight the high costs of living and the sluggish pace of wage growth.

Many experts now expect an increase to come in May.

Ben Brettell, senior economist at Hargreaves Lansdown, said following the latest inflation: “Inflation’s now been above target for 12 straight months.

“This adds further weight to the case for higher interest rates sooner rather than later.”

The UK economy continues to mount pressure on businesses and households across the country. If it’s not the costly business rates or the sluggish wage growth, it’s inflation and the threat of a further interest rate hike. While the doom and gloom splashed across the newspapers suggest that there can be no reprieve, businesses can find relief. Credit management and debt collection companies offer an alternative to traditional lending methods, that keep business owners protected from extortionate interest rates and lending fees. With the relationship between banker and business owner shaky at best, it is wise that business owners look elsewhere.

Here at the Credit Protection Association, we understand the need for business owners to borrow. Whether you have bills to pay, or renovations to complete, or even expansion prospects, CPA can help. Rather than borrowing money from somebody else and with a hefty interest fee added on, we can free up your cash flow. CPA boasts a range of credit management products to keep your business looking its best, and debt recovery services to free up some cash and allow you to seek your next venture; whatever it is.