Today’s inflation data coming in lower than expected at 1.7% will be welcomed by businesses and consumers alike, not only because of more stable prices, but the increased likelihood of further interest rate cuts from the Bank of England.Research from the British Chambers of Commerce has shown clearly the impacts of high inflation over recent years.
However, as inflation ebbed throughout 2023, so too did concern among businesses. This has also been one of the main reasons for the increased business confidence and optimism we see in our data. The easing of inflation has paved the way for a clearer path for interest rate reductions, which have come as a major relief to many firms and today’s data makes that even more likely. However, there are still causes for concern.