Posted on: 04 March 2020
What is price hike day?
As the day when new inflation figures are usually applied to many of the everyday goods and services we use, April 1st is now known to many as National Price Hike Day. For a quick definition, inflation is the rate that prices and goods increase in price. In the UK the Office for Budget Responsibility (OBR) monitors and forecasts the Consumer Prices Index (CPI inflation) and the Retail Prices Index (RPI inflation).
What is CPI inflation?
The Consumer Prices Index (CPI inflation) is a measure of consumer price inflation produced to international standards and is currently the measure targeted by the Bank of England.
What is RPI inflation?
The Retail Prices Index (RPI inflation) is a long-standing measure of UK inflation that has historically been used for a wide range of purposes such as the indexation of pensions, rents and index-linked gilts.
The UK Government uses these measures in various ways and it’s likely that price rises to many products and services will be based on either of these measures, so we have taken a look at some of the things that are likely to increase in price in April 2020. The OBR forecasts that CPI inflation will be 1.99% in in Q2 2020.
What goods and services are usually affected by inflation?
There are a huge variety of products in the UK that will be affected by inflation. Take a look at some of the things below that could affect your business.
If you travel regularly for business, you may have been hit by price rises as early as January. Experts predicted that train fares could rise by 2.8% at the start of this year, with further rises still to come on Price Hike Day. It is also likely that petrol and diesel will inflate, as with previous years.
Air travel has also experienced a price hike in recent years, so if you fly for business, make sure you are aware of this.
If you send parcels or postage for your business via Royal Mail, you may see a price increase in postage prices. The price hike for postage tends to remain in the pennies, but as the saying goes, pennies make pounds, and you could start to see more pounds added to your postage bills.
See if there are any other postage or courier companies who can offer a cheaper rate for postage to help keep your postage expenses down.
TV licence costs
If you have a TV at your business that broadcasts live TV, whether this is for staff or customer entertainment, you will need to have a TV licence. The TV licence has seen a consistent price hike whenever the new inflation rates come in, so expect the same in 2020.
Last year, the price rose from £150.50 in 2018 to £154.50 in 2019, so when the new inflation rates come into effect this year, don’t be surprised to see your TV licence fee also increase.
Whether you are working from home or have a business premises, you will likely have bills such as heating, electricity or water. In previous years, these have been bills that have risen in price on Price Hike Day, so be prepared for these at your business premises.
If your prices are set to go up, do some shopping around to see if you can find a deal with another provider so that you can keep your overhead costs down.
Mobile phone bills
The majority of mobile phone providers will put up their prices in line with RPI inflations. However, some companies may add more. If you have a work mobile phone on a monthly contract, keep track of this increase in price so that you can prepare your cash flow plans for the increase.
Take a look at advice from Which? that gives you an insight about what you can do about midterm price hikes.
It is almost impossible these days for a business to function without internet, so it is essential to have a reliable broadband connection at your premises. Last year also saw prices hike for broadband connections, so make sure that you are prepared for this rise.
You can also shop around to make sure that you are getting the best deals on your business broadband connection to help keep your overheads down.
National Minimum Wage
One of the main overheads that your business will have is employees. The UK government has already announced that they will be upping the minimum wage in 2020 around price hike day, so take a look below at how the minimum wage will rise.
The current minimum wages are as follows:
- Aged 25 and over - £8.21
- Aged 21 to 14 - £7.70
- Aged 18 to 20 - £6.15
- Under 18 - £4.35
- Apprentices - £3.90
In April 2020, the minimum wage will rise to the following:
- Aged 25 and over - £8.72
- Aged 21 to 14 - £8.20
- Aged 18 to 20 - £6.45
- Under 18 - £4.55
- Apprentices - £4.15
Business insurance with Premierline
Finding the perfect business insurance cover that fully protects your business can be difficult if you don’t know what you need. If you find that your insurance premium is rising year on year, get in touch with us here at Premierline, where we can shop around on your behalf to make sure that you are still getting the insurance that your business needs, for the best price.
At Premierline, our insurance brokers are trained to assess your business’ needs to make sure that your business is covered should the worst happen. We work with some of the UK’s most well-known insurers to make sure that your quote is competitive.
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Business Guidance24 September 2019
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