Accounts software can help firms weather high inflation

News Article - Tuesday, June 24, 2008

filed under: Business

Effective accounts software packages can help businesses in Britain to weather rising inflation rates and control costs, it has been suggested.

According to economic research consultancy Capital Economics, inflation will continue to grow in the UK if retail spending continues to rise.

Vicky Redwood, an economist, forecasts that if retail spending increases further "it would increase the chances of a much sharper pick up in inflation then the one we are already looking at".

Official figures showed recently that sales volume over the March to May quarter of 2008 rose by 1.8 per cent compared with the previous quarter, up from 1.5 per cent growth over the three months to April this year.

Ms Redwood claims that spending is likely to fall in June this year, as consumer confidence drops and household budgets are stretched by higher bills.

"If the demand in the economy is holding up well then that increases the chances that retailers could pass on their sharp rises in costs into prices at shop level," she suggested. "We are already looking at inflation rising to 4.5 per cent - we'd be looking at it rising more sharply than that."

Economists have forecast that rising retail spending in the face of soaring food and fuel costs has increased the potential for interest rate increases this year. Businesses trying to manage their finances more effectively during the current economic downturn can invest in accounts software to make the process easier.

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