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

“Today’s slight rise in inflation reaffirms that cost pressures are still a significant concern for businesses.

“The impact of rising costs due to National Insurance, National Minimum Wage increases and rates increases, as well as more general pressure on margins and inputs hasn’t fully worked its way through the economy yet. These pressures could still push price inflation up despite weak overall activity. Fundamental economic blockages relating to energy costs, skills shortages and planning delays aren’t helping.

“The Bank of England still has a difficult path to follow when it comes to interest rates as confidence remains weak and uncertainty remains high.”

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

“Today’s data is a stark reminder that the UK inflation waters remain choppy.

“With CPI rising to 3.4% in December, it’s clear the path to hitting the Bank of England’s 2% target will have further twists and turns. Hopes of another interest rate cut at the start of February now look very unlikely.

“Our latest survey shows inflation remains a key concern for businesses cited by 56% of respondents. The threat of more US tariffs in the coming weeks will only increase price concerns among the firms we represent.

“Business confidence remains weak, and the Budget was a missed opportunity to turbocharge the economy. As firms look ahead to uncertain 2026, they need the Government to deliver on growth. That means action to boost investment, transform productivity and support trade.”