Inflation has risen to 3%. This is above the Bank of England’s target of 2%.

Gus Williams, interim CEO at Chambers Wales South East, South West and Mid, said:

“Today’s announcement that inflation has risen to 3%, its highest level in 10 months, will not be the news businesses were hoping for, but is in line with my view that some inflation projections are overly optimistic.

“The rate, combined with wage inflation figures, highlights the inflationary pressures in the economy and the challenges facing businesses. Although we expect interest rates to come down, there is not a clear path as to how quickly they will reduce and businesses should be cautious about relying on optimistic forecasts.

“While over a third (36%) of businesses in Wales cited inflation as a concern in our Quarterly Economic Survey for Q4 2024, 78% were concerned by taxation. Within the next few months, businesses will be facing rises in employer national insurance contributions and the National Minimum Wage, significant labour costs which could fuel inflation to rise further.

“Businesses will be following upcoming announcements and fiscal events with the hope that cost pressures can be eased, enabling them to plan, invest, recruit and trade with more confidence.”

Stuart Morrison, Research Manager at the British Chambers of Commerce, said:

“Today’s data underlines the inflationary pressures in the economy right now and the real challenges businesses are facing.

“Firms are having to deal with significant cost burdens which threaten to fuel inflation further. Within weeks they’ll be facing the hikes in national insurance contributions and the minimum wage.

“Our latest research shows a spike in the proportion of firms expecting to raise prices following the Autumn Statement, while business confidence has dipped to 2022 levels. Overall, 75% of businesses cited labour costs as a main driver of price hikes and yesterday’s wage data is another reminder of that.

“The inflation landscape, coupled with ongoing global risks and the looming threat of US tariffs, is likely to give the Bank of England more food for thought, as it charts a cautionary path to further interest rate cuts.

“Businesses are crying out for cost-pressures to be eased so that they can invest, recruit and trade – driving forward the economic growth we all want to see.”