What does the rise in inflation mean for your business?

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This week, the government announced that the consumer price index measure of inflation increased to 3.1% in November, a near six year high. Although the Office of National Statistics indicated that dearer computer games and air flights were the obvious areas that have driven the increase, the underlying rise in oil prices and the depreciation of sterling are the underlying factors.

The issue for our clients or potential clients is how to cope with the rise, from a business perspective. When inflation increases, supplier costs go up and get passed on: margins are squeezed. Businesses should consider whether they have enough cash flow to alter their purchasing habits, possibly by ordering or buying in bulk to make savings. Are they getting the best rates in the current climate? If not they may want to consider the kinds of alternative funding solutions Primary Asset Finance can arrange.