Fall in inflation welcomed by businesses but wider geopolitical uncertainty remains – Chamber

Business leaders in Greater Birmingham have welcomed the inflation drop to 2.6 per cent but remain cautious over the impact of the conflict in the Middle East.

The UK rate of inflation slowed from 2.8 per cent to 2.6 per cent in the year to May, according to the Office for National Statistics (ONS).

Food prices also fell, driven by cheaper goods such as chocolate, beef and margarine.

Food and non-alcoholic beverage inflation fell by 0.2 per cent month to month, with sugar, chocolate and confectionary seeing the largest drop in price.

June saw a rise in meat and vegetable prices, but the increase was smaller than the same time last year. Prices of oils, fats and dairy fell in the same month, compared to a year previously.

Fuel prices at the pump also fell in June after the US and Iran agreed to halt military operations and allow the key Strait of Hormuz to re-open.

Paige Bowyer (pictured), policy and research analyst at Greater Birmingham Chambers of Commerce, said: “Businesses across Greater Birmingham will welcome inflation easing to 2.6 per cent in June, but there remains considerable uncertainty over the outlook.

“While lower fuel prices helped bring inflation down this month, ongoing instability in the Middle East means those gains could prove short-lived.

“The recent conflict involving Iran has highlighted just how quickly global events can feed through into business costs, particularly for energy and transport.

“Many firms continue to operate in a challenging environment, with higher operating costs weighing on confidence and investment.

“Inflation is now the most frequently cited concern for businesses across Greater Birmingham, highlighting the uncertainty many firms continue to face.

“Although June's figures offer some welcome relief, rising fuel costs and continued disruption to global energy markets mean inflationary pressures could strengthen again over the coming months.”

“With a new Prime Minister now in office, businesses will be looking for early action that helps reduce the cost of doing business and provides the confidence needed to invest, recruit and grow. The Chamber will continue to work with government and champion the measures needed to support businesses across the region.”

Businesses are also encouraged to join the Business Growth Studio Conference on 13 October at IET Birmingham. Over 150 business leaders will come together for a day of insight, inspiration, and practical strategies to drive business growth.