Inflation falls in March
According to the latest figures released by the Office for National Statistics, the Consumer Prices Index (CPI) rose by 3.2% in the 12 months to March 2024. This is down from 3.4% in February.
What caused the change?
The main reason for the change was food prices are rising by less than they were a year ago. The cost of items such as meat, crumpets, and chocolate biscuits all fell, as did furniture and household goods.
Offsetting these reductions, motor fuels have risen over the past year whereas they were falling a year ago.
What does that mean to business owners?
While the inflation rate is lower, it is still positive which means that prices are still going up, just at a slightly slower rate.
The decreasing rate of inflation does provide some positive news for businesses.
It could mean less pressure on costs and your profit margin. As the cost of living eases, the purchasing power of more consumers increases and this may create more demand.
What now?
The Bank of England will watch the CPI to determine its next move on interest rates.
While there is still a way to go to reach the 2% target, the latest news is encouraging that we may see a reduction in the base rate sooner rather than later.
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