Inflation holds steady at 2% target

UK inflation held steady in June at the 2% target rate for the second consecutive month, according to the latest official figures.

Remaining at the lowest rate in nearly three years, the Consumer Prices Index (CPI) rose by 2.0% in the 12 months to June 2024, the same rate as the 12 months to May 2024, according to the Office for National Statistics (ONS).

The rise in the prices of restaurants and hotels were offset by downward contributions from clothing and footwear.

Neil Rudge, chief banking officer for commercial at Shawbrook, said: “A slowdown/continued hold in price growth is good news for the business community, as not only does this enhance the likelihood of a base rate cut, but also acts as a much-needed indicator of post-election stability after months of uncertainty in the lead-up to the new government.

“We are seeing a steady and growing flow of applications for funding across our SME business, suggesting that businesses are feeling more positive about the future, and ready to press ahead with any growth plans that may have previously been put on hold. With the election behind us, and further clarity on the government’s plans likely after today’s King’s Speech, many business leaders will be starting to concentrate on that next business priority, whether that’s an acquisition, expansion, or exit.”

Mike Randall, CEO at Simply Asset Finance commented: “Businesses will remain hopeful that the new government will be a launchpad for growth. With inflation remaining steady, immediate government action is needed to sustain economic recovery.

“To bolster small businesses, they must address the late payment crisis, implement further planning reforms, enhance capital allowances and capital access while giving them more incentives to invest in the future. Whilst it is positive to see growth high on the agenda, there is no time to lose and the government must act decisively to support SMEs and capitalise on growth opportunities; both immediately and on the horizon.”