Were approaching the end of another month. As we move further into summer and reach the halfway point of 2023, more announcements are being made that could affect UK businesses.
Here is the latest business and tax news from June 2023.
UK Inflation Remains at 8.7%
Despite predictions that it would fall, UK inflation remained at 8.7%, while core inflation increased to 7.1%.
Prime Minister Rishi Sunak rejected suggestions that the UK would enter a recession.
He said: Nobody wants to see a recession. Of course, I dont want to see a recession. Part of the reason we are seeing inflation remain higher than previously anticipated is that the economy has performed better.
To tackle the current inflation rate, the Bank of England increased the base interest rate to 5%.
Following the announcement, Chancellor Jeremy Hunt outlined support for mortgage holders. He reassured borrowers that their credit scores would not be negatively affected simply because they contacted their bank or mortgage lender for help.
Addressing the inflation figures, he said: To everyone who is worried about the high inflation that we have in this economy at the moment, tackling high inflation is the Prime Ministers and my number one priority.
We are absolutely committed to supporting the Bank of England in doing what it takes.
We know the pressure that families are feeling. Thats why weve introduced significant support packages worth around £3,000 for the average household across this year and last.
We will do what it takes, and we wont flinch in our resolve, because we know that removing high inflation from our economy is the only way we can ultimately relieve pressure on family finances and businesses.
UK Told Not to Expect Tax Cuts
Despite the UKs difficult economic climate, Prime Minister Rishi Sunak dismissed the possibility of introducing tax cuts, saying it was simply not possible under the current economic outlook.
He assured the public that despite the current inflation rate and rising prices, it is going to be okay and we are going to get through this. However, he maintained that introducing tax cuts at that point would be irresponsible.
Supermarkets Continue to Cut Food Prices
Supermarkets continued to reduce food prices for customers, with Morrisons and Marks & Spencer becoming the latest retailers to announce reductions.
Tesco, Sainsburys and Aldi had already reduced the prices of essential products, while Asda froze the prices of more than 500 items in an effort to support shoppers struggling with rising food costs.
Marks & Spencer announced price reductions across more than 70 products, while Morrisons planned to reduce the prices of selected products by as much as 25%.
Scotland Becomes More Popular with Investors
Edinburgh, Glasgow and Aberdeen were all ranked among the top five UK cities for attracting European and American investment, according to research from business consultancy EY.
As more projects moved further north, both northern England and Scotland benefited from increased investment.
Although London remained the leading UK destination for foreign direct investment, it experienced a reduction in the number of projects choosing the capital as their base, while Scotland attracted more investment.
Adrian Gillespie, Chief Executive of Scottish Enterprise, said the news was testament to the dynamic business environment that Scotland offers to investors, including our enviable skills base, world-class universities, vibrant innovation districts, ambitious entrepreneurial communities and the outstanding quality of life on offer.
Retail Sales Receive a Small Boost
The Office for National Statistics reported that retail sales increased by 0.3% as consumers spent more in preparation for summer.
Online retailers and garden centres were identified as two of the strongest-performing areas.
Although growth remained lower than in previous years, the increase was still a positive sign for retailersparticularly those that had struggled to attract customers following the pandemic.
Consumers Embrace Subscription Services
A study by OnePoll found that only 1% of the UK residents surveyed did not consider themselves subscribers to any products or services.
Despite financial uncertainty, many people turned to subscriptions and membership schemes as a way of saving money. Approximately 41% cited cost-effectiveness as a benefit, while 49% valued the convenience these services offered.
A OnePoll spokesperson said: Subscriptions are allowing people to buy what they need and enjoy the things they love more easily and for less. This is a huge part of why we are seeing a boom in the subscription economy globally.
Looking Ahead
That is all the news from June. As we move into July, businesses will need to monitor changing interest and inflation rates to protect their finances while continuing to serve their customers.
Have a great month!