UK inflation rose to 2.9 per cent in May, according to the Office for National Statistics.
New figures showed that inflation increased compared to April’s rate of 2.7 per cent, staying well above the Bank of England’s inflation target of two per cent.
Package holidays, video games, food and clothing all saw price increases, the ONS said, while the largest downward trend came from the transport sector, including fuel and air fares.
The rising rate – the highest since June 2013 – will have an impact on consumers, but experts warned that it will also put the pressure on Britain’s small businesses.
“Operating costs for small firms are now at their highest in four years,” said FSB chairman Mike Cherry. “Small business owners and their staff are having to personally absorb these hikes and have less and less room to invest for growth. Support is urgently needed.
“Many small businesses are still reeling from the business rates revaluation that took effect in April. The announcement at the spring Budget of a £300 million hardship fund to help firms worst affected left many feeling hopeful.
“But we’re yet to see that funding materialise, while many local authorities have chased down small businesses to pay incorrect, over-inflated bills.
“The communities secretary needs to get a grip and ensure this proposed support reaches those who need it most in his first days reappointed to the job.
“Our members are also under pressure from spiralling employment and utility costs. An increase in the Employment Allowance to £4,000 is long overdue. A freeze on fuel duty and Insurance Premium Tax IPT would also go some way to relieving the inflationary pressure that has been squeezing small businesses for months now.
“With all these cost pressures, now is certainly not the time to revisit the government’s failed proposal to hike national insurance rates on the UK’s 4.8 million self-employed.”
For more on the inflation figures, see the ONS website.