UK Inflation Falls to 2.6% – But What’s Next for Your Business?

In a small bit of good news, March’s inflation figures have been released showing a drop to 2.6% from 2.8% in February. The main reason? Lower petrol prices, which has offered some relief for households and businesses alike.

However, April has brought fresh challenges. Wage costs and energy prices have already increased, and that’s expected to feed into higher costs in the coming months. The Bank of England’s last forecast showed that they expect inflation to rise again – potentially reaching 3.7% – and to stay above its 2% target until the end of 2027.

The next big date for your diary is 8 May 2025, when the Bank of England will announce whether interest rates are going up, down, or staying put. What does all of this mean for your business planning?

What to watch as a business owner

Even though inflation dipped in March, the picture ahead is more uncertain. Here are a few ways to stay on the front foot:

1. Rising costs could squeeze margins

Now could be a good time to:

• Look into fixed-rate energy deals if they are available.
• Consider if there are any ways that you could be more energy efficient.
• Speak with suppliers or landlords about cost-sharing opportunities.

2. Customers may be price-sensitive

If your costs are rising, many of your customers will be feeling the squeeze too. A smart pricing strategy will help you stay competitive without undercutting your margins:

• Consider tiered pricing or flexible packages.
• Emphasise the value of your products or services rather than just the price.
• Keep communication open with your customer base so you understand their needs. This will help you to know how to respond.

3. Interest rates remain a key factor
   While the dip in March inflation is welcome – much like the fall we covered in Inflation Falls to 2.5%: What this Means for Your Business – it’s not a signal that everything’s cooling down. With inflation likely to rise again, it’s wise to build flexibility into your business plans.

4. Staffing and wages

With living costs staying high, staff who did not receive the increase for minimum wage workers may begin looking for pay rises. If you’re not in a position to match inflation, consider other ways you can support and keep your staff. For instance, you may be able to:

• Offer flexible hours or hybrid working options.
• Provide training or upskilling opportunities.
• Show appreciation through small perks or recognition.

Stay agile, stay informed

While the dip in March inflation is welcome, it’s not a signal that everything’s cooling down. With inflation likely to rise again, it’s wise to build flexibility into your business plans.

Keep an eye on the Bank of England’s interest rate decision on 8 May. It could offer more clues about where the economy – and your costs – are headed next.

Plan Ahead with Wilds

At Wilds Chartered Accountants, we’re here to help you stay resilient through uncertainty. Whether you’re reviewing costs, managing cash flow, or planning for investment, our team can provide clear, practical advice tailored to your goals.

If you’d like to sense-check your current strategy or explore ways to stay agile in a changing economy, get in touch – we’re always happy to help.