Challenging time for business despite inflation drop to 3%

Richard Blackmore from The East Midlands Chamber

East Midlands Chamber has welcomed a large fall in inflation to 3% but warned firms face ‘a wall of pressure’ from high costs and high unemployment, with supportive measures needed from policymakers.

The latest annual inflation data from the Office for National Statistics for the 12 months to January is a significant drop from 3.4% but above the Bank of England’s 2% target.

East Midlands Chamber Director of Policy and Insight Richard Blackmore said: “Inflation is one of the greatest concerns of East Midlands businesses, according to consistent findings of our Quarterly Economic Survey across 2025 so moving toward the Bank of England’s 2% target is what they will want to see but a wall of pressure remains in place and must be addressed by political leaders to achieve growth.

“Unemployment at 6% in the East Midlands is too high, there’s the incoming Employment Rights Act to prepare for by April, continued lack of growth in GDP and the sheer weight of costs to cover, whether from business rates or higher employer National Insurance contributions from the 2024 Budget, so overall a lot for business to bear.

“For the East Midlands to thrive, business needs support and that’s why we recently launched our landmark publication – the Framework for Growth urging policymakers to take action in specific areas we have outlined. That means getting the approach to business rates right for smaller businesses and manufacturers – going far above and beyond the current and inadequate sticking plaster approach applied to pubs; it means getting infrastructure and connectivity improved; it means skills investment being prioritised to get people into jobs and ultimately incentivising business to invest.”