by David Jones

Kent businesses must make "ruthless" efforts to cut costs or face the consequences later.

That's the warning from accountants KPMG following yesterday's Bank of England inflation report.

Commenting on the inflationary pressures facing local businesses, KPMG's Kent director Kevin Meehan said: "KPMG's own research shows that 50 per cent of companies in the Kent region feel that rising inflation is the second biggest threat to their business over the next 12 months.

"Our recent Kent Business Barometer also tells us that cost control is an issue and the majority of businesses have not implemented more sustainable cost efficiency measures during recession, meaning costs are likely to come bouncing back.

"But instead of simply slashing (say) 10 per cent from each function, businesses need to think intelligently about restructuring and bundling costs so they can move to a more variable cost platform.

"Cloud computing, joint ventures and strategic alliances or outsourcing might be options."

Mr Meehan said businesses were increasingly concerned by rising inflation, which was putting pressure on margins and eroding profits.

To stay competitive, he warned, businesses would need to maintain a ruthless focus on the bottom line, and look for further ways of driving out costs.