Another busy week at Commerce House and a meeting with Graeme Chaplin, West Midlands Agent for the Bank of England and a familiar face to many of our members. Graeme is effectively “the eyes and ears” of the Bank of England in our region and meeting with a group of our member businesses gave him the chance to get first hand anecdotal feedback on levels of business confidence and outlook.
Graeme’s arrival came just hours after news that a rise in the cost of household bills had pushed UK inflation to its highest rate in more than a year, up to 3.5% in April. This was a significant rise from 2.6% in March. Economists anticipated a rise in the rate of inflation but 3.5% was higher than expected.
Research conducted by our British Chambers’ of Commerce (BCC) colleagues, found that 55% of businesses expect to increase their prices in the months ahead, linked to the rise in the actual cost of doing business, such as higher employer National Insurance contributions and higher Minimum Living Wage. The Bank of England has set a relatively low and stable target of 2% for inflation. The inflationary climb comes against the backdrop of a recent Bank of England cut in the base rate, from 4.5% to 4.25% This was the fourth cut in the base rate in less than a year.
During our meeting, Graeme carefully listened to feedback from our member businesses. One member spoke of frustrations in finding and successfully recruiting the right calibre of staff, with some applicants failing to even turn up for interview! Wages form an increasing proportion of turnover and we also talked about a need to drive productivity. We told Graeme about the significant impact of increased employer National Insurance contributions and businesses grappling with the dilemma of whether to pass on the increased costs in the form of higher prices for customers. A rise to the Minimum Living Wage has left businesses having to look at how this has narrowed pay differentials and the indirect employee dissatisfaction that can be caused.
There have been some recent positive trading announcements for the UK but the global picture remains turbulent and those who trade overseas find themselves in challenging and changing times.
Our member businesses left Graeme with plenty of food for thought but how is your level of business confidence and outlook? We are halfway through the survey fieldwork period for our very own Quarterly Economic Survey – Q2, 2025. We would be delighted to get your views, taking just 60 seconds to complete our QES. As an added bonus, all completed surveys will be entered into a prize draw to win Parogon Group vouchers. 60 seconds work to be in with a chance of enjoying a delicious meal on us! Please click here to get started:
