Fall in inflation could be 'calm before the storm' says Shropshire Chamber of Commerce

The rate of inflation fell to 2.6 per cent, down from a rate of 2.8 per cent in February, according to data released by the Office for National Statistics (ONS).

The drop in the rate of price rises was driven by falling prices at the petrol pumps, along with a marked drop in the rate for recreation and culture activities, with with toys, games, and hobbies rising by 2.4 per cent in the 12 months to March 2025, down from 3.4 per cent in the 12 months to February.

However, analysts say rates may rise again in April on the back of hikes in gas prices, electricity prices, and water charges - while businesses are experiencing higher employment costs due to increases in National Insurance contibutions and national minimum wage rates which kicked in at the beginning of the month.

Shropshire Chamber of Commerce Chief executive Ruth Ross said today's "small drop" in the rate of inflation could simply be the calm before the storm for the county's businesses.

“Any fall in the rate of inflation is of course welcome in the current economic climate," she said. 

"But Shropshire businesses fear that there are far choppier waters ahead this year.

“We have to remember that this latest data covers the period before the double whammy of minimum wage and national insurance rises had kicked in. Businesses across many sectors in Shropshire are already telling us they are putting up their prices, as they battle with rising employment costs."

According to the government statistics, the average price of petrol fell by 1.6 pence per litre between February and March 2025 to stand at 137.5 pence per litre, down from 144.8 pence per litre in March 2024. 

Diesel prices also fell by 1.6 pence per litre in March 2025 to 144.8 pence per litre, down from 154.1 pence per litre in March 2024 resulting in overall fuel prices falling by 5.3 per cent in the 12 months to March 2025, compared with a fall of 2.5 per cent in the 12 months to February.

“The British Chambers of Commerce’s latest survey showed business concern about inflation at 53 per cent, up from the previous quarter. This is echoed in our own economic surveys here in Shropshire," added Ms Ross.

“The rising global trade war will also heap further price pressure on businesses and consumers.”

“As the BCC’s research team said today, inflationary pressures mean the Bank of England is likely to remain cautious over more interest rate cuts – just when firms are keen for some financial respite.”