Fall in inflation 'pleasing' - but major challenges ahead for businesses, says West Midlands chamber of commerce
A West Midlands chamber of commerce has called for a "clear plan" on reducing cost pressures for small businesses, despite a drop in inflation announced today.
The rate of inflation fell to 2.6 per cent, down from a rate of 2.8 per cent in February, according to data released by the Office for National Statistics (ONS).
The drop in the rate of price rises was driven by falling prices at the petrol pumps, along with a marked drop in the rate for recreation and culture activities, with with toys, games, and hobbies rising by 2.4 per cent in the 12 months to March 2025, down from 3.4 per cent in the 12 months to February.
However, analysts say rates may rise again in April on the back of hikes in gas prices, electricity prices, and water charges - while businesses are experiencing higher employment costs due to increases in National Insurance contibutions and national minimum wage rates which kicked in at the beginning of the month.
A spokesperson for Greater Birmingham Chambers of Commerce said today's "small drop" in the rate of inflation could simply be the calm before the storm for the region's businesses.
“Confounding city analysts projections, it’s pleasing to see that inflation has fallen for the second month in a row. However, major challenges remain on the horizon," said Raj Kandola, director of external affairs at Greater Birmingham Chambers of Commerce.
“At the start of April, we’ve seen the National Insurance hikes and changes to the minimum wage kick in, coupled with the uncertainty caused by President Trump’s tariff regime. The fact remains that inflation is likely to climb again in the coming months.
“Early analysis from our Quarterly Business Report revealed that dealing with rising costs remains a daily battle for many businesses especially in relation to hiring staff and paying energy bills."
According to the government statistics, the average price of petrol fell by 1.6 pence per litre between February and March 2025 to stand at 137.5 pence per litre, down from 144.8 pence per litre in March 2024.
Diesel prices also fell by 1.6 pence per litre in March 2025 to 144.8 pence per litre, down from 154.1 pence per litre in March 2024 resulting in overall fuel prices falling by 5.3 per cent in the 12 months to March 2025, compared with a fall of 2.5 per cent in the 12 months to February.
“With private sector pay continuing to rise and the potential inflationary shock caused by the new tariffs, the prospect of the Bank of England cutting interest rates grows stronger by the day," added Mr Kandola.
“However, firms will also want to see the Government set out a clear plan around reducing these cost pressures across areas such as international trade, employment and business taxes ahead of the Autumn Statement.”
Comment Guidelines
Iconic Media encourages reader discussion on our stories. User feedback, insights and back-and-forth exchanges add a rich layer of context to reporting. Please review our Community Guidelines before commenting.