The United Kingdom recently saw a drop in its inflation rate of 0.1% in May, to 0% in June. So what does this mean for businesses in the UK? In a nut-shell, it means that UK businesses are able to enjoy better profit margins compared to previous months.
As a new business in the UK, now would be the perfect time to invest in protecting future cash flow by taking advantage of these gains.
So what are some of the ways UK small to medium size enterprises are capitalising on this drop in inflation?
1. Increasing inventory
With pricing down, businesses have realised that this may be a great time to increase their stock level in anticipation of future price increases.
2. Increased profit margins
The decrease in inflation means that businesses are able to enjoy benefits off their bottom line by maintaining their pricing, but getting more bang for their sale!
3. A chance to build up liquid cash
The drop in inflation means businesses are able to spend less on previously acquired expenses and therefore save more for future ‘rainy days.’
For UK small to medium sized enterprises, now is the time to experiment with finance options and to look at other ways to weather the storm of future inflation increases, or other financial issues that may arise. It is also the perfect time to increase the stock levels of goods and equipment, as well as make investments for future growth.
Another benefit of the decrease in inflation is that small businesses ultimately have an opportunity to secure loan facilities. Businesses will still need to be aware of changes that could occur to these agreements in the future though, should they decide to go this route.