The chief executive of the British Retail Consortium (BRC) has called for business rates to be frozen as UK inflation hits a five-year high.
According to figures released by the Office for National Statistics (ONS), the Consumer Prices Index (CPI) hit 3% for September. The CPI has risen from 2.9% in August, and was last at this level in March 2012.
The September Retail Prices Index has now hit 3.9%.
In response to these figures, BRC boss Helen Dickinson warned that a resulting increase in business rates, which are set against RPI, would leave retailers “struggling to survive”.
“The consequences of today’s RPI figures could be severe for many shops in a precarious position and struggling to survive,” she said. “Consumers, already seeing household incomes eroded, will face further misery as the pound in their pocket buys them less at the checkout.
“For retailers this will be compounded if UK ministers fail to act and stem the hefty near 4% rise in business rates, which is set to add an extra quarter of a billion pounds to retailers’ already unreasonable business rates burden.
“For many shops this may be the last straw. Across the country, especially in economically deprived and vulnerable communities, the cost of failing to take action will likely be seen in yet more empty shops and gap-toothed high streets.”
John Webber, head of business rates at commercial property agency Colliers International, warned that the government’s decision to delay the switching of business rates indexing from the RPI to CPI measure of inflation until 2020 could also have costly implications for retailers.
“The Treasury has recognised that many retailers are suffering from the business rating revaluation in 2017 and has finally accepted that CPI rather than RPI is a fairer measure of inflation to link business rate rises to,” he said.
“So why instead of introducing the new indexation immediately, is it waiting three years to 2020? How much pain do retailers have to suffer? With inflation on the rise at the moment, by the time we reach April 2020, we could see some very uncomfortably high rating levels.”