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Business

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

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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

Withyhedge landfill site re-opens with community visits

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WITHYHEDGE landfill site near to Haverfordwest has re-opened and has welcomed members from local community councils, county councillors, MSs and MPs, and local organisations including Spittal School, Haverfordwest Airport, and Pembrokeshire Association of Voluntary Services.

Withyhedge landfill site was closed temporarily between 15 May 2024 and 6 January 2025 to enable engineering, and infrastructure works to be completed to address odour issues.  Following a thorough investigation by the site owners and specialist geotechnical engineers, it became clear that the odour was due to the site receiving compliant waste that reacted uncharacteristically when placed in the cell. 

Site owners Resource Management UK Ltd (RML), in collaboration with landfill specialists and regulators, have implemented a series of comprehensive new measures to ensure there is no repeat of the odour event.

Currently the site is only accepting pre-qualifying materials from Dauson Environmental, but it is expected that the site will recommence the acceptance of third-party wastes later in the year should they meet the waste acceptance criteria.

RML Director David Neal said:  “Since the issues experienced last year, we have invested over £10 million at the site.

“This has included major improvements to the site gas management including the installation of an additional gas network, additional flares and enhanced monitoring and recording instrumentation.  In addition, we have reviewed and revised our waste acceptance and waste testing procedures to the satisfaction of the Regulator and to provide confidence and reassurance to the local communities that the chances of any reoccurrence of odour have been minimised as far as possible.

“In direct response to concerns raised by the local community, we have committed to funding an additional 12 months of static air quality monitoring at Spittal School. This monitoring, along with the air quality sensors around the perimeter of the Withyhedge site and those within the surrounding community, will enable RML and other stakeholders to effectively monitor and assess odours within the community.”

Mr Neal added “I would like to thank the local community for their understanding through this challenging time; we are a part of the community, and we want to continue to be a good neighbour.  We will continue with regular updates and more site visits later this year.”

Since the Withyhedge landfill site re-opened on 6 January 2025, NRW, has conducted several compliance visits and have undertaken inspections looking at incoming waste, on site processes and the effectiveness of the revised procedures implemented by RML. 

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Business

Business growth grant applications now open

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A NEW round of business grant funding has been launched to boost Pembrokeshire enterprises and help them grow and prosper.

UK Government Shared Prosperity Fund grants are now open and invite applications from the county’s entrepreneurs and companies.

Managed by Pembrokeshire County Council’s Business Development Team, the fund aims to foster a successful enterprising and entrepreneurial culture within the local economy.

Business Growth Grants of £1,000 to £32,500, Start Up Grants of £500 to £10,000, and Carbon Reduction Grants of £1,000 to £17,500 are open for applications.

The grants will be a contribution towards a business’ proposed scheme, with the applicant sourcing match funding of a minimum of 50% of the total sum from elsewhere.

Peter Lord, Business Support Team Principle Development Officer, said: “We have a diverse range of enterprises in the county which we are keen to support. These grants offer a welcome boost to help businesses grow and are part of our ongoing commitment to supporting economic development.

“The aim of the grant intervention is to strengthen local entrepreneurial ecosystems and support businesses at all stages of their development to start, sustain, grow, and innovate.”

The Pembrokeshire Business Growth Grant supports local businesses and inward investors to grow, prosper and be sustainable, creating and safeguarding jobs and therefore improving the local economy.

The Business Start Up Fund aims to support the creation of new enterprises, while the Carbon Reduction Fund provides capital support to businesses towards the purchase of renewable energy systems.

A new Micro Grant will launch in June, further details to be announced.

Grants will be open for applications until September 2025 or until the fund is fully allocated.

For more information, and to find out more about business support offered by the team, visit: Advice and support for your business – Pembrokeshire County Council

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Business

Cosheston Garden Centre seeking permission to expand

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A PARTLY-retrospective application to upgrade a garden centre on the main road to Pembroke Dock has been submitted to Pembrokeshire planners.

In the application, submitted through agent Hayston Developments & Planning Ltd, Mr and Mrs Wainwright seek permission for upgrade of a garden centre with a relocated garden centre sales area, additional parking and the creation of ornamental pond and wildlife enhancement area (partly in retrospect) at Cosheston Garden Centre, Slade Cross, Cosheston.

The application is a resubmission of a previously refused scheme, with the retrospective aspects of the works starting in late 2023.

The site has a long planning history and started life as a market garden and turkey farm in the 1980s and then a number of applications for new development.

A supporting statement says the previously-refused application included setting aside a significant part of the proposed new building for general retail sales as a linked farm shop and local food store/deli in addition to a coffee bar.

It was refused on the grounds of “the proposal was deemed to be contrary to retail policies and the likely impact of that use on the vitality and viability of nearby centres,” the statement says, adding: “Secondly, in noting that vehicular access was off the A 477 (T) the Welsh Government raised an objection on the grounds that insufficient transport information had been submitted in respect of traffic generation and highway safety.”

It says the new scheme seeks to address those issues; the development largely the same with the proposed new garden centre building is now only proposed to accommodate a relocated garden centre display sales area rather than a new retail sales area with other goods, but retaining a small ancillary coffee bar area.

“Additional information, in the form of an independent and comprehensive Transport Statement, has now been submitted to address the objection raised by the Welsh Government in respect of highway safety,” the statement says.

It concedes: “It is acknowledged that both the creation of the ornamental pond and ‘overspill’ parking area do not have the benefit of planning permission and therefore these aspects of the application are ‘in retrospect’ and seeks their retention.”

It finishes: “Essentially, this proposal seeks to upgrade existing facilities and offer to the general public. It includes the ‘relocation’ of a previously existing retail display area which had been ‘lost’ to the ornamental pond/amenity area and to provide this use within the proposed new building and moves away from the previously proposed ‘farm shop’ idea which we thought had merit. This revised proposal therefore involves an ‘upgrading’ rather than an ‘expansion’ of the existing Garden Centre use.”

The proposals will be considered by county planners at a later date.

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