‘UK profit warnings highest since 9/11’

This was a headline from “The Business” in October. Should we be surprised? Costs are increasing as the higher oil and power prices work through. Business rates and stealth taxes are up. You and /or your business are having to pay more as well, so inflation will increase and because tax has gone up, you may have less to spend. We hear that more taxation is necessary because of increased spending on health, education and fighting crime. However, the perception, from the comments made to us by our clients, is that they are seeing little extra benefit for the extra tax we pay.

So the Bank of England faces a dilemma when setting interest rates. With inflation and taxation up and spending down, what should it do? Fortunately, interest rates remain unchanged. However, would it be better to reduce them and try and get the feel good factor to return? If we all start spending again, industry will pick up and less people will be made redundant.

So, let's have some stability for the time being, with no more interest rate and tax increases.