Formula 1 has agreed to a small increase in the budget cap for the rest of the 2022 season after a commission meeting to discuss rising inflation rates.
F1 introduced a cost cap in 2021 as part of new financial regulations that restrict teams to how much money they can spend per year, with the initial limit set at $145m.
This figure dropped to $140m for this season and is due to fall another $5m in 2023, but escalating levels of inflation and growing freight costs have led to some teams to push for a change to the budget cap limit in recent months.
Red Bull team boss Christian Horner warned that teams could be forced to miss races just to stay within the required $140m limit, as the increased in costs put added strain for them to meet the budget cap.
A meeting of the F1 commission took place on Friday ahead of the Austrian Grand Prix, which led to an agreement to increase the budget cap by 3.1%.
The tweak has been put in place to ease pressure amid the rise in costs and inflation, and earned the support of F1, the FIA and nine of the 10 teams.
In a joint statement issued by F1 and the FIA, it said the high inflation rates since the end of last year risked seeing teams failing to comply with the financial regulations if action was not taken.
“Following consultation with the Financial Advisory Committee over recent weeks, the FIA brought a proposals to the Commission that was approved by the required majority with support from the FIA, Formula 1 and nine of the teams,” the statement reads.
“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.”
Other topics that were discussed from the F1 commission meeting was the approval for next year’s pre-season testing to take place outside of Europe.
As is stands, the sporting regulations state testing can only be held at European venues unless a majority agreement is reached.
This year’s winter testing was shared between Barcelona and Bahrain, with each circuit holding three days of running.
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