Neil McDonnell: Big pay hikes would push many small businesses to cliff edge

Small businesses here are experiencing a cost-revenue squeeze on three fronts

We could yet see energy rationing this winter, which will prioritise households over businesses. This would in turn temporarily close businesses, and undermine their viability and recovery. 

Back in February, Isme had predicted that the European Central Bank would increase interest rates by 0.2% later this year to combat rising prices, but those were the innocent days before Russia invaded Ukraine.

Six months later, we have just seen the ECB increase their base rate by 0.5%, with the strong likelihood of more to come to control surging inflation. Hopefully, Isme’s prediction of a 1.5% ECB rate by the middle of 2024 does not prove similarly optimistic.