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UK furniture sector beats inflation with record-low price increase of 0.5%

New research from money.co.uk business credit cards has revealed that the UK furniture sector is defying broad inflationary pressures, registering the smallest consumer price increase across all industries, just 0.5% between January 2024 and January 2025.

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This minimal rise places the furniture, household equipment, and maintenance sector first in a ranking of the least-impacted UK industries, ahead of transport (1.7%) and clothing and footwear (1.8%), according to data from the Office for National Statistics (ONS).

Notably, prices for major appliances and small electrical goods dropped by 0.8%, glassware and household utensils fell 0.7%, and non-durable household goods saw a decline of 0.2%. This controlled inflation coincided with a dramatic 147% surge in profitability for the sector in Q3 2024, outpacing all other UK industries and likely easing the need to pass rising business costs onto consumers.

This data lands as nearly half of UK businesses (49%) anticipate raising prices in July, largely due to escalating labour costs. Yet, furniture businesses appear to have leveraged increased profitability to absorb these pressures.

Joe Phelan, business credit card expert at money.co.uk, commented:
'The data shows that many UK businesses have been forced to increase their prices in the last year, amid turbulent economic times. With more tax and tariff hikes coming into effect in recent months, it's likely that even more firms will need to adjust their margins to remain profitable.'

Phelan offered financial strategies for SMEs to avoid price hikes, including reassessing cost structures, diversifying revenue streams, and aligning with consumer values:
'Find out what is important to your customers... around two-thirds of both Gen Z and Millennials (58–60%) say sustainability is a top priority in purchase decisions.'
'Use a business credit card to manage cash flow... it's a flexible tool, especially when cash reserves are tight.'

In a landscape marked by geopolitical instability, supply chain disruptions, and shifting consumer habits, the furniture sector's performance highlights its resilience and adaptability.

More information:
Money.co.uk Business Credit Cards
www.money.co.uk

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