UK interest rates and inflation

THE Co-op has warned that up to 60,000 small shops across the UK could face closure without upcoming business rates reform for small shops.

In the 2024 Autumn Budget, Chancellor Rachel Reeves promised to provide permanent business rates relief for small retail properties.

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At the time, the Government proposed raising business rates on the biggest retail properties with values over £500,000.

This would allow for a discount on rates for small retail and hospitality premises to be permanent.

The government has not yet set the rates, but changes are due to take effect in April 2026.

But the Co-op is now urging the Government to commit to the maximum levels of relief for smaller stores in the upcoming Autumn Budget on November 24.

Research conducted by the supermarket found one in eight small high street business owners will be at risk of shutting down if reforms are not delivered.

A further 10% of small said they would need to lay off staff.

Shirine Khoury-Haq, Co-op group chief executive, said: “The proposed system would improve the financial situation of 99% of retailers.

“How much they are protected from tax rises depends on decisions made in this Budget. To boost local economies, create jobs and provide community cohesion, we need inclusive growth.”

“That means supporting the businesses on the corners, in the precincts, on the parades and the high streets of every community.

” In order for them to not only survive, but to thrive, the government has to commit to the maximum levels of relief.” 

It comes as many larger retailers have voiced concerns over plans to increase business rates on larger stores, arguing the move could make them unprofitable or lead to price hikes.

In August, a letter signed by Morrisons, Aldi and JD Sports, warned that further tax rises on businesses could result in the Labour government breaking its manifesto pledge to provide “high living standards”.

It reads: “As retailers, we have done everything we can to shield our customers from the worst inflationary pressures but as they persist, it is becoming more and more challenging for us to absorb the cost pressures we face.”

Analysis carried out by the British Retail Consortium also suggested that 400 larger-format stores, such as department stores and supermarkets could close if the changes took place.

Many businesses have already seen their labour costs rise thanks to the rate of employer national insurance being increased in last year’s Budget.

The Treasury expects the new rates system will only impact the top 1% of properties.

A Treasury spokesperson said: “We are creating a fairer business rates system to protect the high street, support investment, and level the playing field by introducing permanently lower tax rates for retail, hospitality, and leisure properties from April that will be sustainably funded by a new, higher rate on less than 1% of the most valuable business properties.

“Unlike the current relief for these properties, there will be no cash cap on the new lower tax rates, and we have set out our long-term plans to address ‘cliff edges’ in the system to support small businesses to expand.”

Lost decades

WE are now in a new cost of living crisis — or perhaps we never really escaped the first one.

A dismal report yesterday revealed family incomes are £20,000 less than they should have been had economic growth in the UK not flatlined after 2005.

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It means Brit households have effectively lived through two lost economic decades.

Covid, the credit crunch, war in Europe and energy price shocks were hammer blows.

But inflation is now firmly entrenched in the economy thanks to Rachel Reeves’s policies, which have directly driven up prices.

Her National Insurance rise has left hard-pushed customers facing bigger bills at the tills, as shops were forced to pass on huge extra costs.

Unnecessary Net Zero measures only add to the misery.

The irony is that yesterday’s report on living standards was by the Left-leaning Resolution Foundation.

Many of its former members are now sitting in Downing Street as key advisers to the Prime Minister and Treasury.

Yet most of their ideas to fix the economy are based on seizing ordinary people’s hard-earned savings, property taxes and taxing the rich so highly they flee the country.

Big business is already warning of the folly of this outdated 1970s-style approach.

Don’t do it, Chancellor.

Action, not talk

NEW Home Secretary Shabana Mahmood says she will not allow migrants to avoid deportation through bogus last minute claims that they are the victims of modern slavery.

She insists these “vexatious” appeals make a mockery of our laws.

Of course, she is right that migrants are gaming a broken asylum system.

But for all her tough talk, how exactly does she plan to do it?

Successive Home Secretaries have promised to do “whatever it takes” to secure our borders.

All have foundered on the immovable rock that is European human rights laws.

Those same laws which are defended to the hilt by her cabinet colleague, Attorney General Lord Hermer.

We wish Ms Mahmood well. But it’s actions that count.

Hope & glory

FOR all the talk of trade deals and tariffs worth billions there is one British institution that remains priceless.

Our Royal Family — such a vital asset to this country — once again totally charmed the world’s most powerful man, Donald Trump.

Amid the doom and gloom it’s good to remember that no-one does pomp and pageantry quite like us Brits.