Inflation fell to 3.4% in February, down from 4% in January and a large drop when compared to the 40-year high of 11.1% in October 2022.
David Bharier, Head of Research at the British Chambers of Commerce, said: “The easing of the CPI rate to 3.4% will give businesses and consumers some sense of relief. At 4.5%, core inflation has also slowed, and the producer price index for input costs remains negative at –2.7%.
“These positive trends were to be expected as many of the key drivers have begun to fall away.
“However, we are now two years into this inflation shock and prices have simply stabilised at a much higher level. Uncertainty for businesses remains high. Further rises in the minimum wage are likely to impact pay differentials and the ongoing crisis in Gaza, alongside shipping disruption in the Red Sea, is a source of great instability.
“It is also a concern that the owner occupiers’ housing (OOH) component of CPIH has risen by 6%, indicating the adverse impact of higher interest rates. This measure is likely to be exacerbated by further council tax rises.
“The fundamental issues for SMEs still remain – skills shortages, a lack of infrastructure investment, and trade barriers, particularly with the EU, which all feed into GDP growth expectations of less than 1% for the coming years.”
Join Somerset Chamber of Commerce to give your business a stronger voice both locally, regionally and nationally. Combined with local town chambers, we represent over 2,000 businesses across Somerset with a direct line to policy-makers at all levels.
