According to the latest figures released by the Office for National Statistics, the Consumer Prices Index (CPI) rose by 3.2% in the 12 months to March 2024. This is down from 3.4% in February.
The main reason for the change was that prices for food are rising by less than a year ago. The cost of meat, crumpets, and chocolate biscuits all fell, as did furniture and household goods.
Offsetting these falls, motor fuels have risen over the past year whereas they were falling a year ago.
Of course, while the inflation rate is lower, it is still positive which means that prices are still going up, albeit at a slightly slower rate.
A decreasing inflation rate does though provide some positive news for businesses. It could mean less pressure on your own costs and your profit margin. As the cost of living eases, the purchasing power of more consumers increases and this can create more demand.
The Bank of England will be watching the CPI to determine its next move on interest rates. While there is still a way to go to reach the 2% target, the latest news is encouraging that we may see a reduction in the base rate sooner rather than later.
See: https://www.ons.gov.uk/economy/inflationandpriceindices/bulletins/consumerpriceinflation/latest
As the UK tax year-end approaches on 5 April, it’s an excellent time for you to review your business finances and explore tax planning opportunities, particularly if you are self-employed. Tax planning can help you to reduce tax liabilities, boost your cash flow and put you in a stronger financial position.
A report released by the Public Accounts Committee (PAC) has further criticised HM Revenue & Custom’s (HMRC) phone service. It found that nearly 44,000 customers were cut off without warning after being put on hold for more than an hour in the first 11 months of last year.
