Business leaders were angry when the governor of the Bank of England said they should be careful about raising prices to fight inflation.
According to Andrew Bailey, rising costs could push the cost of living even higher, which would be particularly detrimental to those with lower incomes.
But, Tim Martin, the boss of the JD Wetherspoon pub chain, stated that bank managers are “breathing down the neck” of business owners.
According to UK Hospitality, Mr. Bailey ignored the “stark position” that many people are in.
According to the bank governor, who was speaking on the Today program of the BBC, “If all prices try to match inflation, we will get higher inflation.”
A day after the Bank of England hiked interest rates to their highest level in 14 years, Mr. Bailey stated that increasing inflation “hurts people,” and he warned that interest rates will be raised once more if prices continue to climb.
“I would say to people who are setting prices – please understand, if we get inflation embedded, interest rates will have to go up further, and higher inflation really benefits nobody,” he added. “I would say to people who are setting prices – please understand, if we get inflation embedded, interest rates will have to go up further.”
‘An unnerving experience’
However, Mr. Martin stated that although business owners “may wish to follow his advice, many won’t be able to” and cautioned that there might be price increases at the pub chain.
“If cash costs for energy, labor, and supplies rise and prices don’t go up, bank managers around the country will be breathing down the neck of business owners, which is an unsettling experience,” he added. “If cash costs for energy, labor, and supplies rise, and prices don’t go up.”
The chairman of Wetherspoons stated that he was looking forward to a moment when the “ferocious” inflationary pressures that are currently being felt throughout the business began to ease.
The low-cost food and drink business, which has a network of 843 pubs across the United Kingdom and Ireland, recorded a 5% growth in sales over the six months leading up to the 29th of January in comparison with the same time in 2019.
Its statistics are consistent with those that were presented by the British Retail Consortium (BRC), which demonstrated that retail sales had increased by 6.3%, reaching their highest level since March 2022.
On the other hand, it stated that growing inflation meant sales volumes were expected to continue solidly in the negative.
The British Retail Consortium (BRC) reported that despite the continuous rise in the cost of living, consumers were still willing to spend money on necessities, as evidenced by increased sales of apparel and cosmetics.
“Despite the fact that the Electricity Bill Assistance Plan will no longer be available after April and interest rates will continue to rise, there will still be obstacles for consumer spending in the coming months.
“It is crucial that the government avoids any further regulatory burdens on company that would risk pushing prices up and contributing to the stress on consumer wallets,” it said. “It is essential that the government avoids any additional regulatory burdens on business.”
Kate Nicholls, the chief executive of the trade organization UK Hospitality, referred to the fact that so many companies had refrained from raising their prices for as long as they did as a “little miracle.”
According to what she had to say, “to argue that the sector should tolerate these huge cost hikes is to overlook the true and stark scenario that is hitting venues across the country.”
The government has reportedly offered businesses with an “unprecedented” energy support package and will provide “additional support from April onwards,” according to a representative for the ministry.