Suffolk businesses among first to see inflation rise
- Credit: Sarah Lucy Brown
Businesses in Suffolk were the first in the country to flag up concerns about inflation nearly 18 months ago - and are now coming to terms with how rising prices and wages are affecting them.
During the last months of 2020 businesses connected to ports and the transport industry saw a significant increase in the cost of containers which gradually fed in to other areas of the economy.
Part of the reason for that was that the initial 2020 lockdown and the shock it caused to world trade meant many containers were in the wrong place when business restarted - but the knock-on effect was felt around the world.
Now both the price of goods and services - and salaries paid to staff - are on the rise. And that is forcing many businesses to look at the way they work.
Paul Simon, from the Suffolk Chamber of Commerce, said most business sectors were having to adjust to the inflationary pressures - and warned that it would probably continue for some time, at least 12 to 18 months before the situation eased.
He said: "There are price pressures and they push through to salaries and that adds to further salaries.
"That is prompting many businesses to look at the ways they work and is prompting them to invest in different solutions like more use of technology."
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That could mean using Zoom to hold meetings rather than have staff travelling long distances and more use of other innovations in manufacturing and service industries as they emerge.
More businesses are also looking at allowing other benefits to staff. Mr Simon said: "We are seeing more people being given the chance to work flexibly, either to continue working at home or in terms of hours or both.
"This inflationary pressure is something that we haven't seen like this for some time and while many people have been here before, for some it is a new phenomenon."
And while there are no signs of this at present, he warned the big danger would be the kind of stagflation seen in 1970s when inflation increased but there was no economic growth and unemployment rose steeply.
He said: "That would be a very worrying prospect and we hope there will be measures to prevent that happening."