Have your say! Are you worried about the cost of living rising again?

Thomas Fair
·3-min read
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Supermarkets, pubs and other businesses across the UK are sounding the alarm over potential price hikes at the tills, all due to a significant move by the government. In her Autumn Budget speech, Chancellor Rachel Reeves announced an increase in the rate of employer's national insurance contributions, sparking concerns among some firms that this could contribute to escalating costs of living.

Have your say! Are you worried that the cost of living will rise again? Comment below, and join in on the conversation.

The term "cost of living" refers to the amount of money needed to maintain a standard of living. This has a tendency to naturally increase over time, but when such costs spike rapidly, it can lead to a cost of living "crisis" like that seen in the UK since 2021, forcing people into difficult financial choices about basics such as food or household goods.

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In response to this additional tax burden anticipated for the year, businesses are cautioning that consumer prices may rise. Simon Roberts, Sainsbury's chief executive, expressed that the changes represent a serious financial challenge, estimating the impact on the supermarket to be around £140 million annually and noting: "This barrage of costs coming at us is significant and we're an industry, a very efficient industry and intensely competitive, and there just isn't capacity to absorb all of this."

JD Wetherspoon, a major pub operator, has indicated that its operational costs would surge by £60 million due to the Autumn Budget, while Marks & Spencer forecast a hefty £120 million blow to their finances. M&S Chief Executive Stuart Machin said: "I want to keep focused on fantastic product and value and minimise the impact on customers."

Businesses might handle the financial hit in several ways other than hiking prices; they could opt for lower profit margins, decrease expenses, or reduce staff numbers and salaries over time.

Chancellor Rachel Reeves acknowledged that deciding to increase taxes on businesses was tough but necessary, asserting it was the "right choice" to generate funds for improved public services such as education and healthcare. UK firms also need to budget for a minimum wage increase, higher business rates, and updated workers' rights laws.

UKHospitality, a trade body for the hospitality sector, forecasts around a 6% price rise due to these changes. The group's CEO, Kate Nicholls said: "The increase to employer NICs and, crucially, the lowering of the threshold left hospitality owners with a sleepless night as they came to terms with the enormous cost they will have to bear from April onwards. The new cost of employing core members of staff is eye watering an increase of at least £2,500 is far, far beyond what anyone's worst-case scenario was."

"Hospitality is at the heart of our communities but the enormous value it delivers both socially and economically is under threat."

Have your say! Are you worried that the cost of living will rise again? Comment below, and join in on the conversation.

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