Inflation hit a five-year peak in September, rising to three per cent as food and fuel prices continued to climb.
According to the Office for National Statistics (ONS), the Consumer Price Index (CPI) measure of inflation rose from 2.9 per cent in August – matching levels not seen since April 2012.
This is above the government’s target of two per cent, and came close to prompting a letter from the Bank of England governor Mark Carney, who is required to inform the government if inflation exceeds three per cent or falls below one per cent.
The Retail Price Index (RPI) which sets next year’s business rates didn’t budge from 3.9 per cent, meaning businesses must face a further tax hike in 2018.
The British Retail Consortium (BRC) have called on the government to place a freeze on business rates, warning they will slap retailers with a further £273 million tax bill next year and could have “severe” consequences for many small businesses.
“The consequences of today’s RPI figures could be severe for many shops in a precarious position and struggling to survive,” BRC chief executive Helen Dickinson said.
“Consumers, already seeing household incomes eroded, will face further misery as the pound in their pocket buys them less at the checkout.
“For retailers this will be compounded if UK Ministers fail to act and stem the hefty near four per cent rise in business rates, which is set to add an extra quarter of a billion pounds to retailers’ already unreasonable business rates burden.
“For many shops this may be the last straw. Across the country, especially in economically deprived and vulnerable communities, the cost of failing to take action will likely be seen in yet more empty shops and gap-toothed high streets.”