Business

UK inflation falls to 2.3%, raising questions over interest rate cuts

Published

2 years ago

May 22, 2024

UK inflation has dropped to 2.3% in April, marking its lowest level in nearly three years. However, the decline fell short of analysts’ expectations, dampening hopes for an imminent interest rate cut by the Bank of England.

City analysts had anticipated a reduction to 2.1%, closer to the Bank’s 2% target. This discrepancy led markets to adjust their forecasts, now predicting that the Bank’s current rate of 5.25% may not be reduced until August, rather than next month as previously speculated.

The Office for National Statistics (ONS) reported that the decrease from March’s 3.2% was primarily due to lower energy and food costs. The last time inflation was this low was in July 2021. Significant contributions to the drop included a record 27% fall in electricity and gas prices over the past year and a modest 2.9% annual rise in food and soft drink prices, the smallest increase since November 2021.

Illustrating the ongoing strain on household budgets, furniture retailers reduced prices by 0.9% between March and April, while overall goods prices dropped by 0.8% month-on-month. However, annual services inflation, reflecting inter-company charges, remained stubbornly high at 5.9%, only slightly down from March’s 6%.

Despite the overall fall in the consumer prices index (CPI), the ONS noted that higher property rents and mortgage costs kept the alternative CPIH measure, which includes housing costs, elevated at 3% year-on-year. Petrol and diesel prices rose last month, although the price of Brent crude has recently stabilised around $83 (£65) per barrel.

KPMG UK’s chief economist, Yael Selfin, suggested that the chance of an interest rate cut next month had diminished. “Falling inflation nears the Bank of England’s target but may not suffice for an early rate cut,” she stated. Echoing this sentiment, Paula Bejarano Carbo of the National Institute of Economic and Social Research noted that core inflation, which excludes volatile food and energy prices, remains high at 3.9%. Combined with robust wage growth, this persistence could compel the Bank’s monetary policy committee to maintain rates.

Prime Minister Rishi Sunak heralded April’s CPI figure as a “major moment for the economy, with inflation back to normal,” asserting that it validated the government’s economic strategy. Conversely, Shadow Chancellor Rachel Reeves argued that it was premature for the Conservatives to celebrate, highlighting the ongoing pressures of soaring prices, mortgage bills, and taxes.

In the eurozone, inflation held steady at 2.4% in April.

Separate ONS data indicated a larger-than-expected rise in public borrowing for April, with the monthly deficit reaching £20.5bn. Despite a decrease in debt payments, the high cost of servicing government debt exceeded expectations, potentially ruling out pre-election tax cuts.

Economic adviser Martin Beck from the EY Item Club described the public finance figures as disappointing, suggesting that continued higher borrowing costs would likely prevent any significant fiscal easing before the next general election.

Welsh Conservative Shadow Minister for Economy and Energy, Samuel Kurtz MS, praised the inflation drop, attributing it to the UK Conservative Government’s effective economic policies. He called on the Welsh Labour Government to support the economy by fully implementing business rates relief and reforming growth taxes.

Paul Butterworth, CEO of Chambers Wales South East, South West, and Mid, noted that while the reduction in inflation was significant, it remained above the Bank of England’s target. He expressed hope that the continued downward trend might prompt an interest rate cut soon.

Meanwhile, the British Association for Counselling and Psychotherapy (BACP) warned that despite the fall in inflation, the cost of living crisis continues to severely impact mental health. Their recent survey revealed that 74% of respondents felt their mental health was worsened by the crisis, with particularly high impacts on those with pre-existing conditions, women, ethnic minorities, and lower-income households.

BACP’s Director, Dr Lisa Morrison Coulthard, emphasised the need for government action to address these mental health challenges. The BACP has proposed a 13-point action plan to improve access to mental health services, stressing the importance of funding and support for vulnerable populations.

As the nation grapples with economic and mental health pressures, the government’s response to these intertwined issues will be crucial in the coming months.

Business

Wales unemployment close to UK rate as ministers promise productivity push

Published

7 minutes ago

June 18, 2026

Tom Sinclair

WALES’ unemployment rate is broadly in line with the UK average, according to the latest labour market figures.

The Welsh Government said figures from the Annual Population Survey showed unemployment among people aged 16 and over in Wales at 4.5%, compared with 4.4% across the UK.

Ministers said Wales’ employment rate was also “relatively close” to its all-time high, but acknowledged that official labour market data should be treated with caution because of continuing concerns over reliability.

The figures come as the newly elected Welsh Government seeks to put productivity at the centre of its economic agenda.

A Welsh Government spokesperson said: “As a newly elected Government we are committed to driving investment, innovation and higher productivity across Wales.

“We have announced a National Productivity Goal to close the gap with the rest of the UK and help unlock the full potential of the Welsh economy.

“By focusing on productivity, we will deliver more jobs, higher pay, stronger businesses and thriving communities.”

The Government says the new goal will help shape the work of its planned Welsh innovation and development agency, including how it supports businesses, develops skills and invests in the wider economy.

However, ministers also said Wales’ labour market appears to be following similar trends to the UK as a whole.

They pointed to ongoing work by the Office for National Statistics to improve the quality of Labour Force Survey data, saying the figures should be read alongside other labour market indicators to get a clearer picture.

The Cabinet Minister for Enterprise, Connectivity and Energy, Adam Price, is seeking a meeting with the ONS to discuss the reliability of labour market data for Wales.

Business

Crackwell Street closure extended again as Tenby traders voice frustration

Published

3 days ago

June 15, 2026

Tom Sinclair

TRADERS in Tenby have been left frustrated after Pembrokeshire County Council extended the closure of Crackwell Street once again.

The street, which provides direct access to Tenby Harbour, has been closed for several months to allow scaffolding work to be carried out at Goscar House.

It had been due to reopen on Friday, but the council has now extended the closure until June 19.

Local businesses say the repeated delays have affected trade, with concerns that the ongoing closure is making access to the harbour area more difficult during a busy period for the town.

The road remains closed while scaffolding is in place at the property.

Caption:

Ongoing closure: Scaffolding remains in place on Crackwell Street, Tenby (Pic: Malcolm Richards).

Business

Celtic Freeport five-year plan puts Milford Haven at centre of green energy future

Published

3 days ago

June 15, 2026

Tom Sinclair

Strategy promises investment, skilled jobs and new supply chains, but major barriers remain over grid connections, planning and delivery

THE CELTIC FREEPORT has published a new five-year strategy setting out how Milford Haven and Port Talbot will be used to attract major investment, create jobs and build a new low-carbon industrial economy across South and West Wales.

The plan, published today, Monday (Jun 15), says the Freeport will focus on renewable energy, advanced manufacturing, port infrastructure, floating offshore wind, hydrogen, sustainable fuels, carbon capture, cleaner steel and low-carbon logistics.

For Pembrokeshire, the strategy places Milford Haven at the heart of plans to modernise port infrastructure, support future energy projects and create new employment and training opportunities for local people.

The Celtic Freeport spans sites in Milford Haven and Port Talbot and is backed by a public-private partnership involving Associated British Ports, Camplas, Dragon LNG, Impala, Ledwood Mechanical Engineering, Neath Port Talbot Council, the Port of Milford Haven, RWE and Pembrokeshire County Council.

Over a 25-year period, the Freeport is projected to deliver more than £8bn of investment and create 11,500 jobs.

Focus on Milford Haven

The five-year strategy says the Freeport will help enable major port infrastructure upgrades to support the roll-out of floating offshore wind.

Milford Haven is already one of the UK’s most important energy ports, and the plan makes clear that the area is expected to play a major role in the transition from traditional energy industries to cleaner fuels and renewable power.

The document says the Freeport will work to attract investment into key sectors including offshore wind, hydrogen, solar, batteries, sustainable aviation fuel, ammonia, pipelines, carbon capture and storage, and advanced manufacturing.

It also says the Freeport wants to create a stronger local supply chain so that businesses in Pembrokeshire and the wider region can benefit from major industrial development, rather than seeing work and contracts go elsewhere.

The strategy says one of the aims is to ensure local businesses and landowners are supported in accessing capital and external investment for land remediation, infrastructure upgrades and priority projects.

Jobs and skills

A major part of the plan focuses on skills, training and local employment.

The Freeport says it wants to create a “sustainable talent pipeline” where local people can see future job opportunities and receive support with upskilling, career advice and connections to employers.

The strategy says this will include work with schools, colleges, trade unions, local authorities and employers to identify future skills gaps and create employment pathways.

Pembrokeshire College is named among the education partners expected to help deliver workforce transition and future skills for both existing energy industries and new green energy sectors.

The plan also says the Freeport will look at ways to support economically inactive people into work and will consider using some funding to establish a community fund focused on projects that visibly benefit local people, including possible support for transport-related challenges.

Investment and infrastructure

The strategy sets out four main priorities for the next five years.

These are driving capital investment into key Freeport industries, helping landowners progress development projects, exploring local supply chain innovation and decarbonisation, and laying the foundations for a thriving skills market.

The Freeport says it will deliver a £25m seed capital programme by the end of 2028/29 and will prioritise at least two seed capital projects in 2026, subject to agreements on governance and funding.

Business cases for selected projects are expected to be prepared during 2026 before being considered by the Celtic Freeport board. If projects are no longer considered feasible, the strategy says a reallocation process will be required.

The Freeport also plans to build a pipeline of future investment projects using retained non-domestic rates, with revenues expected to begin flowing back from 2028.

The document says business development and marketing will be used to attract high-value tenants to priority sites, including through international investment campaigns and sector-specific proposals.

Planning and grid issues

The plan acknowledges that major development is not straightforward.

It says businesses face challenges including grid connection issues, planning delays, policy uncertainty and the high upfront cost of infrastructure.

To tackle this, the Freeport says it will work with the UK and Welsh Governments, Natural Resources Wales, local authorities and public investment bodies to remove barriers and unlock private investment.

It will also hold monthly meetings with landowners to monitor progress, identify delivery problems and escalate strategic risks where necessary.

Governance and public accountability

The strategy also sets out plans to expand the Freeport’s governance arrangements.

The current board includes representatives from Milford Haven Port Authority, Associated British Ports, Pembrokeshire County Council and Neath Port Talbot Council.

The Freeport says this structure will be expanded to include non-executive directors and representatives from key landowners and business operators.

The plan also includes commitments to publish board schedules and minutes, hold one public board meeting each year, organise an annual community open day, run skills and employment sessions in schools, and hold local job fairs and apprenticeship roadshows as opportunities grow.

Trade unions are also expected to have a formal route into the process through a workers’ consultative forum, with the strategy saying unions will help inform skills interventions, fair work principles and employment priorities.

Cathy Hall, Interim CEO of the Celtic Freeport, said: “This Five-Year Plan sets out how the Celtic Freeport will support businesses across the region to decarbonise, grow and access new opportunities.

“We will be focussing on delivering projects to consolidate the region’s strong industrial future.”

The publication of the plan marks an important moment for Pembrokeshire, where hopes of long-term industrial renewal are closely tied to Milford Haven’s role in energy, ports and marine engineering.

Supporters say the Freeport could bring major investment and skilled jobs to the county.

But the success of the plan will depend on whether the promised benefits are felt locally, whether Pembrokeshire firms can win work from the new supply chains, and whether young people in the county are given a realistic route into the jobs created by the green industrial transition.