Businesses are looking forward to reducing interest rates on the back of news of reduced inflation, says the British Chambers of Commerce.
David Bharier, Head of Research at the BCC, said: “Today’s data showing CPI has eased further than expected to 1.7% continues the move away from a prolonged period of high inflation. Coupled with an easing to average earnings growth, businesses will be looking forward to a clearer path for further interest rate cuts.
“Our research has shown that a steadily declining number of businesses are concerned about inflation. In our recent Quarterly Economic Survey, 46% of businesses cited inflation as concern, down from the all-time high of 84% seen in 2022. Taxation has instead emerged as the top issue of concern.
“However, major uncertainties remain. With escalations in the Middle East conflict, oil and energy prices are likely to be impacted. Our latest Forecast expects inflation to tick higher towards the end of the year at 2.6%. Core inflation also remains quite stubborn and owner occupiers’ housing costs continue to rise.
“This month’s Budget is a critical juncture. Businesses will need to see action on implementing an effective industrial strategy, solving the investment puzzle and supporting global trade, particularly with the EU.”
