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

“Inflation easing slightly to 3.4% in May was widely expected, but this elevated level remains a real concern for businesses and confirms that price pressures persist.   

“Our research shows that firms’ price expectations jumped after the Autumn Statement, which included the increase in employer NICs, and again following the US tariff announcement. Taxation is now the most cited concern among firms. 

“In the short term, there are some clear headwinds. The recent escalation between Israel and Iran poses a significant risk to global supply chains. Any major disruption in the Strait of Hormuz could echo the supply chain shock of 2021, with surging oil and shipping costs. Many smaller businesses will have little capacity to absorb these pressures. 

“The mounting uncertainty makes it more likely that the Bank will hold the interest rate at 4.25% tomorrow. Nevertheless, a path towards further rate cuts will be greatly welcomed by businesses to get borrowing costs down. But other steps are needed to alleviate cost pressures, including a plan to ease the tax burden businesses face, and further reductions in trade friction between both the EU and USA.”