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

Call to convert former farmhouse/guesthouse to housing approved

Published

12 hours ago

June 18, 2026

Bruce Sinclair - Local Democracy Reporter

A CALL to convert a former Pembrokeshire farmhouse and guesthouse into housing units has been given the go-ahead by county planners.

In an application to Pembrokeshire County Council, Dan Hildebrand, through agent GMW Design, sought approval for the subdivision of Torbant Farmhouse, Croesgoch, near Haverfordwest, to form four residential units.

A supporting statement through Johnston Planning on behalf of the applicant and agent said: “The property has historically been run as a successful guesthouse for a number of years but has recently come under new ownership. The new owner wishes to maximise the potential of the existing residential floor space through the subdivision of this generous property into four units.”

It added: “Whilst the intention is to utilise the subdivided property for residential purposes due regard is given to the 2022 changes to the use class order which in effect created new residential classes for new development in an effort to control unrestricted holiday uses in sensitive locations.

“As such a ‘free use’ is sought within use classes C3 (use as a sole/main residence), C5 (use as otherwise as a sole/main residence) and C6 (use as a commercial short term let).

“These proposed uses, which are considered to be reasonable and to be fully compliant with current planning policy (especially when one has regard to the existing use) will provide the owner with flexibility in terms of proposed occupation. Ensuring full and meaningful use of the property in the future.”

It said the property was once part of Torbant Farm, now been broken up into a number of separate properties, including Torbant Caravan Park immediately to the north.

It added the works to the property “are minimal and will have a negligible impact externally,” adding: “Internally whilst the layout will alter marginally no structural works to the property are proposed.

“In character terms therefore, there will be no discernible physical impact either to the dwelling itself or to the wider locality.”

Six objections to the scheme were received, raising concerns including harm to visual and residential amenity, ecological impact, infrastructure constraints, and claimed inaccuracies in the submitted application, as well as the application overstating available parking space “which would encroach onto shared access areas, causing obstruction and conflict between users”.

An officer report recommending approval said the scheme was amended to move car parking provision within land under the applicant’s control.

It concluded the scheme represented “an efficient use of the existing building stock,” and it “would not result in any external alterations to the host building and would not give rise to unacceptable harm to the character or appearance of the building or its wider rural setting nor the residential amenities of neighbouring occupiers”.

The application was conditionally approved by county planners.

Business

Council-owned housing at former Milford Haven social club approved

Published

12 hours ago

June 18, 2026

Bruce Sinclair - Local Democracy Reporter

PLANS to convert a former Pembrokeshire town centre social club into council owned social housing have been given the go-ahead.

In an application to Pembrokeshire County Council, the authority itself, through agent KEW Planning, sought a change of use of the former Manchester Club social club, Fulke Street, Milford Haven to seven social rented residential units.

The Manchester Club public house/social club closed in March 2024 due to the cost of operations rising to be more than the monetary value that the club delivered, remaining vacant since this time, and was marketed for sale before an offer from the council was accepted.

The council scheme will provide five one-bed flats, one two-bed, and one studio flat; an amended scheme from discarded initial options which included one for 12 apartments and two studio flats. The scheme revised to restrict proposed alterations to the existing building to a minimum.

The proposal includes the demolition of the single storey garage to the front, and a single-storey extension at the rear, which will allow a communal amenity area.

A supporting statement said: “The vision for this project is to provide social housing to address housing stock shortages and to give a new life to a vacant building in a central location of the town. The property will be rented to mixed aged tenants, with PCC as the corporate landlord.”

An officer report recommending approval said the site had been marketed since 2024 at £170,000, with a £150,000 offer made but was unable to be proceeded with, the price later reduced to £150,000, three offers later received including £140,000 from the council, which was accepted in April 2025.

“For the two years that this property has been marketed the market response to the property has been limited with no viable interest in retaining the building for its existing community facility use,” the report said.

It concluded: “The loss of the former community facility has been robustly justified in accordance [with planning policy], and the scheme would deliver social and economic benefits through the provision of additional housing and the re-use of a vacant building.

“The proposal would enhance the visual appearance of the site, provide an acceptable standard of residential amenity for future occupiers without undue harm to neighbouring properties, and would not give rise to unacceptable impacts in respect of highway safety, drainage, biodiversity or the historic environment.”

The application was conditionally approved.

Business

Wales unemployment close to UK rate as ministers promise productivity push

Published

13 hours 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.