Consumer price inflation eased again last month, according to the latest official figures, but many households and small businesses say the slowdown has yet to bring any noticeable relief in their day-to-day costs.
The Office for National Statistics reported that the annual rate of price rises had fallen to around 3 per cent, down from a peak well above that during the recent cost-of-living squeeze. While the figure marks a steady return towards the Bank of England's 2 per cent target, prices are still climbing — just more slowly than before.
Why slower inflation does not mean cheaper
A falling inflation rate does not mean prices are coming down; it means they are rising at a gentler pace. The cumulative increases of the past three years remain baked into household budgets, from the weekly shop to energy standing charges and rents. For a typical family, that leaves little room to rebuild savings drawn down during the tighter years.
"A lower headline number is welcome, but it is not the same as lower bills. Families are still paying far more than they were a few years ago," one high-street trader said.
Small firms caught in the middle
Independent retailers, cafés and tradespeople face a particular bind. Business groups, including the Federation of Small Businesses, have warned that input costs, higher borrowing rates and softer consumer demand are squeezing margins from both sides.
Some shopkeepers say they have absorbed cost increases rather than pass them on, wary of losing customers who are watching every pound. Others have trimmed opening hours or delayed hiring while they wait to see whether interest rates are cut further this year.
- Review supplier and energy contracts fixed at the peak — some may now be renegotiable.
- Adjust pricing in small, regular steps rather than one large jump customers notice.
- Check eligibility for council or national support schemes aimed at small firms.
What comes next
Attention now turns to the Bank of England, whose rate-setters have signalled that any cut in interest rates will be gradual and dependent on inflation continuing to ease. For households on variable mortgages and firms carrying debt, the timing of that next move may matter more than the headline rate itself.
