'Inflation drop will boost freelancers, at least for now'

Self-employed sole traders should generally benefit from inflation dropping in January to the lowest level in two years, freelance body IPSE has calculated.

Not only was the easing of prices the second of its kind in two months, but it also undercut the Bank of England’s two per cent target by falling to 1.8%, the group pointed out.

Cheaper electricity and gas prices drove the fall, according to the Office of National Statistics, both of which home-based freelancers are known to be particularly conscious of.

Reflecting on its release of the figures, the ONS suggested that the downward movement was partly helped along by energy regulator OfGem bringing in a price cap on energy bills.

But fuel prices fell too in January, indicating that ‘on-the-road’ freelancers who had to travel to clients in last month’s icy conditions will be just as relieved as those who work at home.

“In the short-term, this drop in inflation is a welcome boost for the self-employed …in otherwise difficult times,” said the Association of Independent Professionals and the Self-Employed (IPSE).

“The self-employed in particular can benefit from lower travel costs and smaller energy bills, thus reducing their overheads.”

 But IPSE’s economic policy adviser Ryan Barnett tempered his optimism. “While this [inflationary drop] is welcome for most freelancers in the short-term, we must also consider the poor economic growth statistics released...[recently] amid continued uncertainty about Brexit,” he said.

“Taken together, falling inflation and poor growth statistics could be a sign of the economy weakening in the face of declining global economic performance and Brexit turbulence.”

Addressing the latter, which both creative bodies and think-tanks sound increasingly exasperated about, the association said that certainty from the government was overdue.

“For the self-employed and businesses generally, more must be done to ensure a smooth exit from the EU,” IPSE said. “Freelancers and other businesses urgently need clarity – for themselves and for the sake of the economy.”

 

18th February 2019

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