SJL Insurance founder discusses the latest inflation figures, business confidence and whether Labour is delivering on its pro-growth promises
UK inflation remained unexpectedly unchanged at 2.8% in May, offering a rare piece of positive economic news for businesses and households amid ongoing financial pressures. Economists had forecast a rise to 3% as geopolitical tensions in the Middle East threatened to drive up costs, but a slowdown in food price inflation helped offset increases in transport and other sectors.
The latest figures have been welcomed by Chancellor Rachel Reeves, who said they demonstrate that the Government’s economic strategy is working and helping to build a more secure Britain. However, while steady inflation may provide some reassurance ahead of the Bank of England’s latest interest rate decision, many business leaders argue that significant challenges remain.
Businesses Still Facing Tough Economic Conditions
Simon Lancaster, founder of SJL Insurance and owner of Worcester City Football Club, says the reality on the ground is far more complex. As the head of a company that works with thousands of small and medium-sized enterprises across the UK, Lancaster believes many firms are still struggling with rising employment costs, high borrowing costs and a lack of confidence to invest.
In this interview, Simon discusses what the latest inflation data means for business owners, the impact of interest rates on investment and growth, and why many firms remain concerned despite signs that price pressures may be easing.
Interest Rates, Investment and Business Growth
With the Bank of England’s interest rate decision closely watched by firms across the country, Simon explains how borrowing costs continue to influence business decisions. He argues that lower or stable rates could help restore confidence and encourage businesses to invest, expand and create jobs.
Rachel Reeves, Labour and the UK Economy
Simon also shares his views on Government policy, including National Insurance increases, business taxation and Labour’s pledge to create a pro-growth economy. While acknowledging that some economic pressures are beyond the Government’s control, he questions whether businesses are receiving the support they were promised.
With sectors such as hospitality, transport and logistics continuing to face mounting pressures, Simon argues that stabilising inflation alone will not be enough to restore confidence. Read on for his analysis of the latest UK inflation figures and what they could mean for businesses, economic growth and the wider outlook for the British economy.
Interviewer: 1:47 right now. The Chancellor, Rachel Reeves, says new UK inflation figures show that she has the right economic plan to build a secure Britain. It has remained unexpectedly unchanged at 2.8 per cent in May, experts had predicted that the war in the Middle East could push it up to three per cent, but an easing of food prices has meant it’s remained steady and has offset the rising pace of costs in areas like transport. Well, to discuss this, I’m joined now by Simon Lancaster, founder of SJL Insurance and owner of Worcester City Football Club. Simon, thank you very much indeed for your time this afternoon. What does this mean then for business owners like yourself?
Simon: It’s good to be with you. Well, we’re an insurance broker, like you say, and we insure 1000s of businesses, small to medium size, primarily, so we speak to lots of businesses, and it won’t surprise you to hear they’re having a really tough time. So, whilst this is welcome news, and I think we can all hang our hats on any bit of welcome news that we get at the moment, I think it’s only a small drop of good news, and businesses out there do need a lot more help from the government, really. I know that interest rates aren’t within the government’s control. The Bank of England will be doing that tomorrow, and hopefully they’ll, they’ll stay the same, which again is another small sort of green shoot of of good news, but I think businesses do do need more, more and more help off the government, really, because times are really tough for them, we’re hearing.
Interviewer: yeah, absolutely, as you’ve said, looking ahead to that interest rate decision. I mean, how does that affect business owners in the decisions that they’re having to make every day?
Simon: I think it’s helpful, because what it is helpful, because as small businesses and medium-sized businesses, we need to make decisions to invest to grow, and that inevitably involves hiring people and/or borrowing money, and obviously the cost of hiring people has increased with the NI and the minimum wage and things like that, so if interest rates are also high, it just makes it really difficult for businesses to invest and borrow and grow. So, if interest rates are to stay the same or even tick down a little bit, I think that would help businesses to invest, have the confidence to invest and borrow and grow. And if the government could do a little bit of help as well, like things doing things like reverse NI increases, then I think it would really help business to have the confidence to invest and grow, which is obviously what the economy needs.
Interviewer: Yeah, so even with all of this, you know, inflation remaining steady, interest rates potentially, you know, looking better, better news. Yeah, fingers crossed. But challenges, of course, still remain. Do you think business owners will be looking at all of this, thinking, you know, few can wipe the sweat from their brow. Things are getting better, or will they still be worried about the future?
Simon: No, I think they’re definitely at the stage where they’re still worried. Like I said, every bit of good news is good news, exactly that. But it’s still really challenging times. We insure, particularly lots of restaurants and hospitality businesses, and hauliers, and obviously they’re being particularly hard hit at the moment, hauliers with the cost of fuel and restaurants with the various challenges that they’ve gotten, so there are some, some specific sectors that we insure are really, really up against it, but even if you look at the wider business community, they’re all struggling and struggling to have the confidence to invest, to grow, and ultimately, you know, increases to capital gains tax, and all these things, they all put businesses off investing to grow, because you think you know what, why, if there’s so much, so much tax, and so much, so much problems in the economy, it makes it difficult for businesses. So, yeah, I think in answer to your question, they’re still at the stage where they’re, it’s a bit gloomy, shall we say.
Interviewer: And Simon, just finally, do you agree, Rachel, with Rachel Reeves when she says that she has the right economic plan?
Simon: No, I think in fairness to her and the government, there are lots of factors out of their control, like the Iran war and lots of other things to give them some, some to cut them some slack, but they did come in promising to be pro business and to help and support business, and I think that feeding is wearing a little bit thin. I feel like just from just, I don’t know, but just from the outside looking in, it feels like the more left-wing Labour MPs, backbench MPs, are wagging the tail a little bit. And I think Rachel Reeves, and in fairness, and Keir Starmer probably not able to be as pro business in the economy as they would like to be, really, and the things that they need to do, and that they promised to do when they came in, in their manifesto, you know, they promised to be pro growth, very famously, and pro business. It doesn’t feel like that in the business community, and when I’m speaking to business, I have to say that the feeling is that they’re not, they’re not doing that. So, I think it’s time for them to deliver on their promises, really.
Interviewer: Simon, thank you very much indeed for your time. That’s Simon Lancaster, founder of SJL Insurance and owner of Worcester City Football Club. 152 is the time. We’ve got some more information for you on the news that a former health care worker at.
