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The cost of living has risen dramatically over recent months. Foods like bread, fruit, rice and of course fuel have pushed the rate of inflation up to 3.8 percent.

Phil Kennedy spoke to Christina Howe, Group Head of External Affairs at Thames Valley Chamber of Commerce to find out how this is affecting local people and businesses.

You can hear the whole interview by clicking on the link below:

What does this mean for us? We know that the prices have gone up. It feels more like 13.8% rather than 3.8%Ìý

"That's right it's very unusual circumstances at the moment. We've enjoyedÌýa long period of releasing equity and having cheap goods and so on and I think it really has come to a halt.

"I think the cost of fuel isn't going to get any less and people recognise that. And of course that has an impact on the distribution of food and other goods that we are buying.

"I think people are looking to buy locally and be a bit more intelligent
about their journey. But I think people are generally being a
bit more cautious."

What does that mean for small businesses here in the Thames Valley?

Small businesses can't sustain the pressures of high prices, they've got to pass it on toÌýthe consumers. Some small businesses will be feeling the pinch. That's in terms of the retail trade.

"But most of our members aren't in the retail trade. We're finding in terms of small businesses they are looking overseas. In fact we've had a 17% increase in people exporting goods."

"So some small businesses are being creative. The smaller companies who have associations with construction and property and so on they'reÌýhaving a hard time at the moment.

"But one thing we do need to stress is that we don't feel that we are in a recession. Times are hard and people are going to have to take radical steps in what they do. But we are not in a recession yet."

What do you make of the Tories? They are saying that companies that feel they might be at risk should be given a little more time to sort themselves out.Ìý Do you think that's a good idea?

Oh yes absolutely. We spent so much time trying to encourage entrepreneurship and enterprise its on the government's agenda. There's so much money ploughed into those areas from the government.

But it doesn't make sense to encourage people to set up in business and then give them so many constraints.

"You know the government's intention to put the two pence duty on fuel would be ridiculous at this point. And all the time we're dealing with red tape for small businesses.

"So any alleviation in that area for small businesses should be encouraged, we whole heartedly support that".

I must admit I'm quite surprised speaking to you, you don't sound as down as a lot of us our feeling, given the current economic climate.

"Well I can't be because at this momentÌýI'm at Ascot racecourse. And we've had an exhibition here with approximately 1500 people, small businesses as well, visiting the stands.

"As I say there are very few retailers here.We acknowledge that there are problems with the construction industry. But you know our economy is based on more than that. We won't go into recession just because of those issues.

"We've got businesses from all over Europe who've attended this conference. And one stand have just reported to me that they've generated £50,000 of business. But everybody has to tighten their belts and watch what they invest in."