Inflation falls to 2.6%

Gus Williams, interim CEO at Chambers Wales South East, South West and Mid, said:

“UK inflation dipped in March on the back of higher than expected 0.5% GDP growth figures for February.

“Under normal circumstances businesses might feel buoyed by this, however the economic trajectory of the next few months is being driven from the White House. It is difficult for any business to plan in the current circumstances and uncertainty is going to weigh on a lot of business investment decisions.

“The ripple effect of US tariffs could affect the economy as a whole in any number of directions and impacts each business differently; there will be winners and losers. The UK could end up with an accelerated trade deal with the US or the global economy could tank. We simply don’t know and hence volatility in the markets is going to continue.

“There is a reasonable likelihood that a stronger pound, deflationary price pressures from Asia and a weaker economy could give the Bank of England more room to cut rates this year. Something will need to happen to kickstart business confidence or the uncertainty will hold sway. The butterfly wing effects of Trump’s tariffs will reverberate until we have some more certainty about how permanent the tariffs are and just how far the US and China are going to go in their bubbling trade war.”