Business costs drop by 0.5%
Business costs have fallen by 0.5% as firms benefit from lower borrowing charges, according to a new report today.
A price index worked out by the London Chamber of Commerce, which includes all costs to industry, including energy, goods and wages, showed a 0.5% fall in the year to May compared with the previous month.
The chamber said businesses across the country were benefiting from borrowing costs that were much lower than a year ago.
Without another credit crunch, borrowing costs should remain low, said the report.
Erik Britton, Director of Fathom Financial Consulting, which helped with the research, said: "Variable cost inflation has picked up this year driven by larger bonus payments.
"Cheaper borrowing costs have allowed firms to keep total cost inflation close to zero, widening business margins.
"The risk is that activity will falter during the second half of the year, as the government takes steps to address the fiscal deficit, hitting company profits."
Dr Helen Hill, director of policy at the London Chamber of Commerce said: "Lower borrowing costs will only have a positive effect on the economy if businesses are confident enough to invest.
"Whilst there are signs of recovery, conditions remain tough and firms continue to hunker down. We expect huge retrenchment from next week's Budget, but we must nonetheless encourage firms to expand. The public sector will contract and the private sector will be the lynchpin of the recovery."
- 1 Is this bridge haunted by the ghost of nu rave?
- 2 The West has it totally wrong on Lee Kuan Yew
- 3 The day I starred in Only Fools and Horses
- 4 Scientists have discovered a simple way to cook rice that dramatically cuts the calories
- 5 Zayn Malik quits One Direction: Hundreds of workers request compassionate leave following band member's exit
Is this bridge haunted by the ghost of nu rave?
Saudi Arabia says it won't rule out building nuclear weapons
Germanwings plane crash: Andreas Lubitz 'had eyesight problems' and woke from nightmares 'screaming we’re going down'
The battle for the Middle East's future begins in Yemen as Saudi Arabia jumps into the abyss
Jeremy Clarkson 'could be given minder' ahead of a potential Top Gear return
Ukip supporters are 55 or older, white and socially conservative, finds British Social Attitudes Report
JK Rowling responds to fan tweeting she 'can't see' Dumbledore being gay
Jeremy Clarkson sacked live: Alan Yentob 'wouldn't rule out' ex Top Gear host's BBC return
David Cameron calls Labour 'hopeless, sneering socialists' while announcing 7-day NHS plans
Revealed: Putin's army of pro-Kremlin bloggers
The West has it totally wrong on Lee Kuan Yew
iJobs Money & Business
Negotiable: Recruitment Genius: To provide a prompt, friendly and efficient se...
Negotiable: Recruitment Genius: You will be the first point of contact for all...
£18000 - £24000 per annum + benefits: Ashdown Group: HR, Payroll & Benefits Of...
£35000 - £38000 per annum + benefits : Ashdown Group: A highly successful, int...