Business needs support despite slight economic growth as Middle East conflict adds to challenges

Richard Blackmore from The East Midlands Chamber

The East Midlands Chamber has called for greater support for the region’s businesses despite GDP having grown 0.5% in the three months to February.

The above expected figure published by the Office for National Statistics, up from 0.3% in the three months to January, contrasts a downgraded UK growth forecast from the International Monetary Fund (IMF) for 2026 from 1.3% to 0.8%.

East Midlands Chamber Director of Policy and Insight Richard Blackmore said: “In normal times any lift in GDP might be an encouraging sign, especially if it formed a trend over a period of time but these are far from normal times, with significant uncertainty around the impact on business from the ongoing Middle East conflict, while this latest GDP data reflects a period before the Iran War.

“With the IMF having downgraded its forecast for UK economic growth from 1.3% to 0.8%, the OECD – the Organisation of Economic Co-operation and Development – having also recently lowered its UK growth expectations and economists widely expecting UK inflation to soar above 3%, there’s reason to be anxious.

“In the East Midlands, we’ve seen a 3% rise already in firms reporting price pressure, with 4 out of 10 considering price increases – that’s according to our first Quarterly Economic Survey of 2026 – but even that figure is taken from a time just before the Iran War. Less than half the businesses in the region have attempted to recruit, according to that research, while inflation and corporate taxation top the list of concerns firms have.

“What business needs right now is support, specifically to mitigate the significant increase in energy costs businesses are currently experiencing, when energy costs were already a significant concern prior to the Middle East conflict. It hit at a time firms were already experiencing very tough conditions – everything from business rates to increased staffing costs, to export challenges and inflation.

“The Chamber’s Framework for Growth, published at the end of 2025, identifies key areas across energy support, regulation, infrastructure, skills and devolution, that if prioritised by policymakers would alleviate some of the pressure faced by businesses.”