Reacting to the latest inflation data, published by the ONS this morning, David Bharier, Head of Research at the British Chambers of Commerce, said:

“Today’s data showing the CPI rate slowed to 2.8% in February is good news, but it’s too early to be certain on the direction of travel.

“Volatility will be a key feature for the next few months. SMEs are battling shocks from both home and abroad in the form of domestic tax increases and a looming global tariff war.

“Many firms tell us they will have to raise prices and rethink recruitment when NICs and NLW increases kick in next month. Investment is also likely to suffer until greater certainty emerges.

“Our latest forecast expects inflation to remain elevated over the coming months, staying above the Bank of England’s target.

“As the Chancellor prepares to deliver her Spring Statement this lunchtime, firms are under no illusion about the challenges they are facing right now.

“If the inflation rate continues to go into the right direction, further interest rate cuts could follow, which will be greatly welcomed by SMEs looking for respite on borrowing costs. But SMEs are facing a major squeeze right now and they urgently need the Chancellor to provide clarity and a sense of direction in today’s statement.”