BRITISH businesses are losing £10.6bn a year due to stubbornly high inflation, research released this morning has revealed.
Low interest rates and strong inflation are eroding companies’ bank deposits, according to accountancy group UHY Hacker Young.
“While many larger corporations may have treasury departments responsible for managing the company’s cash, most small businesses cannot afford this luxury,” said Derek Levy, a partner at UHY Hacker Young. “As such, savings are often left to stagnate in accounts offering little or no interest.”
The retail price index (RPI) rose by 0.2 percentage points last month, to print 5.2 per cent annualised.
The consumer price index (CPI) rose by 0.1 percentage point to 4.5 per cent, with the Bank of England expecting it to top five per cent in the coming months.
CPI has remained over the Bank’s two per cent target for 20 straight months. The Bank’s latest projections show inflation remaining above target throughout 2012.
The research by UHY Hacker Young showed deposits from UK companies shooting up by 77 per cent over the last decade, to reach £241.5bn.
“In this climate of low interest rates and high inflation, business owners really need to be more pro-active and shop around for the best rates, even if these are hard to come by,” Levy added.