The tax hikes introduced by Chancellor Rachel Reeves in last year’s Autumn Budget will mean it is “sometime” before inflation gets down to the government’s two per cent target, the UK arm of kitchenware brand Smeg has warned.
The Abingdon-based division said the increase to employers’ National Insurance contributions, which came into effect in April, will delay inflation reducing to the intended level.
The comments, made in Smeg’s UK results which have just been filed with Companies House, come on the same day the Bank of England’s Monetary Policy Committee (MPC) voted 7-2 to hold interest rates.
Inflation hit 3.8 per cent in the year to August, with food prices rising higher for the fifth consecutive months.
Smeg’s accounts show that its turnover increased in 2024 from £65.2m to £67.4m while its pre-tax profit jumped from £897,000 to almost £1.8m.
The UK division is part of the wider Italy-headquartered company which was founded in 1948.
Smeg expects continued sales growth
A statement signed off by the board said: “Whilst 2024 saw a steady reduction in overall inflationary pressures, global shipping costs remained volatile with attacks on shipping heading towards the Suez Canal adding cost and time delays to inbound products with transport in costs increasing by 53 per cent since 2023.
“Whilst this has increased costs, the company has successfully managed to mitigate [the] impact of these delays on stock levels.
“Increases recently announced by the government to employers’ National Insurance contributions which are due to [took] effect in April 2025 will, we believe, maintain inflationary pressures and it therefore will be sometime before inflation returns to the government’s target of two per cent.”
Smeg added: “Whilst the market continues to remain uncertain for some time, Smeg’s iconic brand and style is increasingly desired by a wider body of consumers and we remain expectant of continued sales growth in future years.”