Business groups warn rising energy prices 'will put brakes on economy'

Business groups warn spiralling energy prices ‘will put brakes on economy’

• Business chiefs have written to Chancellor Rishi Sunak over cost of living crisis
• They urged him to ease the impact on households and firms across Britain
• The alternative, they said, was to risk throwing pandemic rebound into reverse

Britain’s biggest business groups have warned the Chancellor that spiralling energy prices ‘will act as a brake on the recovery’.

As the cost of living crisis deepens, business chiefs wrote to Rishi Sunak urging him to ease the impact on households and firms – or risk throwing the rebound into reverse.

They called on Mr Sunak to act ‘urgently to support consumers with spiralling bills and help business manage inflated costs’. 

Without any intervention, rocketing energy prices ‘will act as a brake on the recovery from the Covid-19 pandemic’, they said.

The letter, signed by the British Chambers of Commerce, the Confederation of British Industry, the Federation of Small Businesses and the Institute of Directors, came a day after Mr Sunak promised to help firms with rising costs.

As the cost of living crisis deepens, business chiefs wrote to Rishi Sunak (pictured) urging him to ease the impact on households and firms – or risk throwing the rebound into reverse

In an exclusive interview with the Daily Mail, he said he was ‘looking at lots of things’ to support companies and households.

Fears were raised about the health of the economy as retail spending in December – the most important time of the year – suffered its biggest slump on record. 

And there are concerns that households, which are being squeezed by the soaring cost of essentials, will be put off buying ‘big ticket’ items in the coming months.

The Office for National Statistics (ONS) said yesterday that total retail sales fell by 3.7 per cent compared to November – the biggest December fall since records began in 1996. The Omicron variant was a factor, along with rising prices.

Economists are worried families may simply have too little to spend, since the cost of essentials such as food and energy is soaring. Inflation hit 5.4 per cent in December – a 30-year high.

In their joint letter, the business groups said: ‘Estimates show the energy price cap is to rise dramatically in April to £2,000 for the average household. 

These increases will have knock-on impacts throughout the economy. We therefore urge the Government to take action.’

On prices and taxes, they added: ‘The crisis has left companies with little protection while they face soaring wage, shipping and tax costs. 

Many will be left with little choice than to pass costs on to their customers.’

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