UK inflation has fallen to 2.3%, just above the Bank of England’s target of 2% and the lowest level for three years, according to the latest figures from the Office for National Statistics, writes Emma Warren, Chairperson of Somerset Chamber of Commerce Board of Directors.

While the overall drop in inflation does mean a cut in interest rates in the summer is now more likely and will be welcomed across the business sector, uncertainty still persists with global conflicts and trade wars threatening supply chains. 

Real wage costs also continue to grow – the British Chambers of Commerce’s most recent business survey found almost half of firms expect their prices to rise over the next three months, with labour costs cited as the main driver. 
UK firms need to see a long-term vision for the UK economy from politicians, including action on making trade easier, especially with the EU.

Thankfully, the UK’s brand and competitiveness remain strong and we are already a world-leader when it comes to digital trade.

Business needs to work with Government to put in place a framework that makes use of all the advantages the UK has to keep us at the top table and to access incentives for our exports overseas.

We must also look again at fixing some of the growing trade barriers with the EU. It is still our biggest trading partner, but firms continue to express huge frustration with the complexity and costs involved.

We need further action from policymakers to reverse recent declines - this means a focus on digital trade and more efficient customs processes to cut costs.

Other steps include removing some of the trade frictions with Europe, completing free trade agreements already underway and working with business to get more value for exporters out of our existing deals.

The outlook may have brightened, but the skies are not yet fully clear.