Higher inflation mean lower business confidence
Continuing inflation is an issue for all, but growing inflation is a real problem to which businesses tend to react to worst – as a result of higher interest rates.
Charlie Ambler, co-chief investment officer at Saltus explained: “Another uptick in inflation would be frustrating, but not wholly unexpected. The Bank of England has already signalled that services inflation and energy price pressures would keep the headline rate sticky for some time. If CPI does climb again, markets are unlikely to take it well, particularly as hopes for an August rate cut start to look more ambitious.
“From an investor perspective, this continues to be a challenging environment to navigate. The UK economy is clearly cooling, contracting 0.1% in May, which further limit the Bank’s room for manoeuvre. But the longer rates stay restrictive, the greater the drag on confidence, especially among entrepreneurs and business owners – who are often the first to pull back from risk in uncertain times.”
Karl Matchett16 July 2025 06:58
Biggest financial reforms ‘in a decade’ to bring risk-taking back into City
Rachel Reeves has unveiled a package of reforms to the UK’s financial system set to be the biggest in a decade, aimed at delivering economic growth and spurring on retail investing.
Changes include reforming the bank ring-fencing regime and reducing burdensome regulation in the City in order to reintroduce “informed risk-taking” into the financial system, the Government said.
The Chancellor said the “Leeds reforms”, unveiled in the West Yorkshire city, “represent the widest set of reforms to financial services for more than a decade”.
New measures are intended to help drive increased levels of investment among both financial firms and individuals.
More here from Anna Wise at PA:
Karl Matchett16 July 2025 06:40
Experts estimate food prices to continue acceleration
Looking deeper into the numbers, Barclays analysts expect the same 3.4 per cent – but for food to carry on rising.
“Headline CPI inflation should remain at 3.4% in June, unchanged from May, with a deceleration of services price growth driving an easing in core CPI. We expect an acceleration of food price inflation but core goods and services to undershoot the BoE’s expectations,” wrote analysts in a note.
Karl Matchett16 July 2025 06:24
UK inflation: Where next after 3.4 per cent in May?
As a reminder and a look back, it was air fares and fuel which fell last month, but food was increasing at the highest rate in 12 months, with household goods also increasing in price.
That resulted in a 3.4 per cent inflation rate for May.
A month earlier the CPI figure was 3.5 per cent, which was later revised to 3.4 per cent due to errors in some figures regarding vehicles.
So, we’re expected to flatline again in terms of inflation for June – it could even tick up to 3.5 per cent again.
Karl Matchett16 July 2025 06:14
Will Rachel Reeves’ mortgage bombshell do more harm than good?
The chancellor is right to woo the City – she can’t risk alienating them when she needs their support, writes James Moore.
But he’s not convinced her plan to win them over will work…
Karl Matchett16 July 2025 06:05
Inflation and Business news – 16 July
Good morning and welcome to The Independent’s live business blog, where today we’re focusing on inflation figures for June as well as reaction to Rachel Reeves’ speech last night, stock market news and more.
Karl Matchett16 July 2025 05:58
