A deal has been agreed to relax Formula 1’s budget cap due to soaring inflation levels, though not all teams were in favour of the move.
But with other, lower-spending teams confident of meeting the limit, reaching a agreement on easing the limit has proved difficult.
An F1 Commission meeting took place today, ahead of the start of practice for the Austrian Grand Prix, involving the FIA, Formula One Management and representatives of the 10 teams. The FIA and FOM issued a joint announcement afterwards stating a deal had finally been reached.
“Rapidly increasing inflation rates since the end of 2021 have affected Formula 1 teams, and it is the opinion of the FIA and Formula 1 that this creates a risk of noncompliance with the Financial Regulations if actions are not taken,” said the statement.
While the regulations already allow for a spending increase by up to 3% in line with inflation, a further rise of 3.1% has been agreed. However one team opposed the change.
“Following consultation with the Financial Advisory Committee over recent weeks, the FIA brought a proposal to the Commission that was approved by the required majority with support from the FIA, Formula 1 and nine of the teams,” said the statement.
“The proposal recognises the unexpected increase of costs incurred by teams in 2022 thereby permitting indexation at a limited rate of 3.1% (which takes into account the original 3% inflation threshold already set out in the regulations) and permitting compounding of this rate as from 2023. This will preserve the long-term integrity of the Financial Regulations.”
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