What the numbers mean for your business this week

The Bank of England held the base rate at 4.75% at its last meeting, with markets now pricing in a possible cut later in the year. For small businesses carrying variable rate debt, the relief is coming — but slowly. Factor current rates into any financing plans for the next six months minimum. Consumer price inflation dropped to 2.8% — closer to the Bank's 2% target but still above it. More relevant for most SMEs is PPI input inflation, which rose 0.4% month on month. That means your suppliers are facing rising costs, and you should expect pressure to pass those on within 60 to 90 days. Review your supplier contracts now while you have time to negotiate rather than react. Sterling has strengthened slightly against the dollar, providing modest relief for businesses importing from the US and Asia. If you source globally, update your landed cost calculations before placing the next order — small FX movements compound significantly on volume purchases. The employment picture remains challenging. Wage growth is running at 5.9% year on year — well above inflation. Combined with the Employer NI increase to 15% from April 2026 and the National Living Wage rising to £12.21 per hour, labour costs are the single biggest pressure point for most local SMEs. If you haven't reviewed your payroll cost structure this year, do it now. On the positive side, services PMI is at 53.2 — solidly in expansion territory. If your business is service-led, conditions are improving. Manufacturing PMI at 47.5 tells a different story — product businesses face tougher conditions and need tighter cost discipline heading into H2.