Firms count the cost as wage bills increase

Like many small business owners, foundry boss Andrew Young is feeling the squeeze in the face of stubbornly high inflation.

His firm has had to contend with a three-fold increase in costs this year and a rising wage bill.

Mr Young, who employs several dozen workers at sites in Kirkintilloch, Motherwell and North Yorkshire, put up pay by 12.4% on average last November, bringing forward the usual April pay rise.

On Tuesday, official figures showed regular pay in the UK grew by 7.3% in the March to May period from a year earlier, equalling the highest growth rate last month.

However, pay rises still lag behind inflation - the rate at which prices go up.

Mr Young is keen to retain his workers, who he points out could earn as much stocking shelves at the supermarket near his Kirkintilloch site.

"The hourly rates are going up," he explains. "We have a good team here and I am trying my best to keep them as comfortable as possible as their living costs go up.

"There is nothing we can do - we can only react to what's going on in the outside world."

Mr Young says his company, Archibald Young, which makes a range of bespoke metal products, has had to raise prices to meet the increasing costs the energy-intensive business has been facing.

He says other foundries have faced even higher energy bills than him, as his business was on a three-year fixed deal until recently.

So far his customers have soaked up the price increases.

"Are we going to reach a point where people say 'no more?' Yes, possibly."

He adds: "There is nothing we can do to reduce inflation. If we continue to increase our costs, our prices, that is going to have a knock-on effect on inflation."