Gus Williams, interim CEO at Chambers Wales South East, South West and Mid, said:

“Today’s announcement that inflation has risen to 3%, its highest level in 10 months, will not be the news businesses were hoping for, but is in line with my view that some inflation projections are overly optimistic.

“The rate, combined with wage inflation figures, highlights the inflationary pressures in the economy and the challenges facing businesses. Although we expect interest rates to come down, there is not a clear path as to how quickly they will reduce and businesses should be cautious about relying on optimistic forecasts.

“While over a third (36%) of businesses in Wales cited inflation as a concern in our Quarterly Economic Survey for Q4 2024, 78% were concerned by taxation. Within the next few months, businesses will be facing rises in employer national insurance contributions and the National Minimum Wage, significant labour costs which could fuel inflation to rise further.

“Businesses will be following upcoming announcements and fiscal events with the hope that cost pressures can be eased, enabling them to plan, invest, recruit and trade with more confidence.”