Fleets are set to be ‘tested to the extreme’ as a consequence of the latest mini-budget, according to the Association of Fleet Professionals…
Rising Costs
The Association of Fleet Professionals (AFP) has stated that “businesses need better” following the announcement of the Government’s mini-budget; and the subsequent plunging of the pound. Following Chancellor Kwarsi Kwarteng accounting the largest series of tax cuts in fifty years, the pound fell to $1.03 on Monday, before eventually stabilising at $1.08. This initiative will require substantial Government borrowing, which critics say is unsustainable.
Naturally, a diminished pound means that goods priced in dollars will be costlier for British businesses and consumers. This comes at a time when inflation is at a 40-year-high, too. For Fleets, this likely means increased fuel and maintenance costs, which could place extreme pressure on those that fail to properly prepare.
Fleets to be Tested
Paul Hollick, the chairman of the AFP, believes that the coming months will be especially testing for the fleet sector. He said, “in just a matter of days since the new prime minister and chancellor put their economic ideas into effect, we have seen the markets become deeply disorderly with just about every credible economic commentator saying more will follow. It’s a situation where exchange rates are falling, bond interest rates are shooting up, inflation is likely to continue to increase and interest rates will be forced to rise. This will help create a scenario in which fleet managers will be tested to the extreme”.
He continued, “the cost of transporting people and goods therefore looks set to rise substantially. Perhaps only petrol and diesel prices will fall in the coming year but even that is not certain. The Government argument against this backdrop might be that the growth for which they are aiming will outpace the pain we are seeing. I would very much be very pleased to be wrong here, but it seems unlikely that will be the case given the evidence so far”.
Hollick concluded, “fleets and the businesses they serve need stability,” Hollick added. “We do not currently have that. The fleet sector is an essential part of industry in the UK and, as its trade body, we do not take a political stance. This is not a political comment. But our businesses need better”.
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