Windhoek: British businesses and households are counting on effective measures in October's Autumn Budget to offer some "breathing space" amid rising inflation and a subdued labor market that are intensifying cost-of-living pressures, experts said. The country's consumer price index (CPI) rose 3.1 percent year-on-year in August, up from 2.9 percent in July, data released by the Office for National Statistics (ONS) showed on Wednesday.

According to Namibia Press Agency, on a monthly basis, the CPI rose 0.5 percent in August, up from 0.3 percent a year earlier, the ONS said, noting that transport, particularly motor fuels, made the largest upward contribution. "Higher fuel prices caused inflation to accelerate further in August. With tensions escalating across the Middle East, we expect that increased energy costs and some pass-through to domestic prices will further push up inflation over the months ahead," said Martin Sartorius, lead economist at the Confederation of British Industry.

"Inflation has now topped 3 percent just five months after it last breached that mark (3.3 percent in March) -- once again heading in the wrong direction," the Resolution Foundation said, adding this is bad news for families struggling with the cost of living. Stuart Morrison, research manager at the British Chambers of Commerce (BCC), said the BCC forecasts a further CPI increase will result in higher domestic food costs.

Morrison also highlighted the price pressure for businesses, noting the BCC's latest survey of almost 5,000 firms shows inflation is now the main concern, cited by 66 percent of firms. "High domestic costs and geopolitical headwinds are combining to create choppy inflationary waters for businesses to navigate," he noted.

In terms of everyday essentials, August CPI figures highlight the challenging environment retailers face, with headline inflation going up and goods such as clothing and accessories seeing marked increases, said Harvir Dhillon, lead economist at the British Retail Consortium. Although retailers continue to do all they can to hold prices down, "they will be fighting with one hand tied behind their back" until fiscal conditions improve, he added.

Businesses' confidence in hiring was accordingly dragged by cost pressure. Tuesday's ONS data showed Britain's unemployment rate for people aged 16 and over persisted at a high level of 4.9 percent in the three months to July. Notably, total pay growth has eased in recent months and was last lower nearly six years ago, marking an impressive difference between the public and private sector. In the June-August period, job vacancies remained at their lowest level outside the pandemic period for more than a decade.

Slower pay growth and fewer job posts, together with hiking prices are making it harder for low-income households to make ends meet. In particular, the Resolution Foundation mentioned the energy bill, which is still 26 percent higher in real terms than five years ago, with the price cap set to rise in October and again in January 2027, possibly by a significant amount.

"With money tight and living costs rising, the government should resist throwing money at costly blanket support. It would get far more bang for its buck by targeting help at lower-income families feeling the squeeze most -- through targeted energy discounts -- if bills rise sharply in January as now looks increasingly likely," said James Smith, chief economist at the foundation.

"The cost of doing business and the cost of living are two sides of the same coin," Morrison said, adding that it's crucial the chancellor of the exchequer looks to ease business cost burdens at next month's Autumn Budget. He called for a targeted tax reduction package to ease energy and business rate pressures for all firms. Taking the Autumn Budget as a chance to reset and reduce the cost pressures for retailers, Dhillon said the chancellor can take meaningful action to halt the rise in costs, including business rates, energy bills, employment costs and packaging fees in order to support retailers, and by extension, the households who depend on them.