Business news

Business News - February 2025

This month (February 2025) we have updates on the following topics:

• General economic outlook - Inflation and Interest Rates
• East Midlands Business Environment
• Main Business Concerns
• Skills in demand in our region
• Labour markets

General Economic Outlook - Inflation and Interest Rates:

• In the January there was a sharp jump in the rate of inflation. The rate in the UK rose to 3 percent from 2.5 percent the month before. This pushed inflation further above the 2 percent target set by the Bank of England and to its highest level in the last 10 Months. This rise was sharper than had been initially expected, with forecasts expecting a growth to 2.8 percent, being driven by rises in the price of food, air fare, and the increase in private school fees.
• Coupled with the rises in energy prices and council tax economists seem uncertain whether this rise is temporary or will prove to be more persistent. Ruth Gregory, Chief UK Economist at Capital Economics said that she doubted the rise would prevent more interest rate cuts by the Bank of England, but did say that “the risk is the rise in inflation proves more persistent and rates are cut more slowly than we expect.”
• The Organisation for Economic Co-operation and Development (OECD) said that while the budget had led to an upgrade in forecasted growth for the UK in 2026, going to 1.7 percent from 1.2 percent , they also expected that interest rates would fall more slowly. The OECD release predictions twice per year to give a guide for the future but they can be off the mark, and they do change.
  
  • website: Interest rates forecast to be higher for longer due to Budget - BBC
  • website: Inflation jumps on food, air fares and school fees - BBC

East Midlands Business Environment  

• Business Activity in the East Midlands continued to rise through the month of December, this was a marginal expansion in output across the private sector but one that was the steepest in three months. This was accompanied by a fall in new orders, that indicates lower levels of demand on the whole.

• Lisa Phillips, Regional Managing Director, Midlands and East from NatWest said that “Although input prices increased at a quicker pace, firms were able to pass-through higher costs to customers via the fastest rise in output charges since March 2024. Confidence to hike selling prices reflected greater optimism in the outlook for output.”

• website: UK Regional Growth Tracker Report for December 2024 - NatWest

Main Business Concerns:

According to the Business Insights and Impacts Survey, ran by ONS, 65 percent of businesses expressed a concern for their business.

The top 5 concerns raised were:

• Falling Demand of Goods and Services - 17.7 percent 
• Taxation - 14.6 percent 
• Competition with other UK Businesses - 7.7 percent 
• Inflation of Goods and Services Prices - 7.1 percent 
• Energy Prices - 5.5 percent 
  • website: Business Insights and Impact on the UK Economy: February 2025 - ONS

Skills most in demand in our region from November 2024 to January 2025 were:

1. Warehousing
2. Auditing
3. Continuous improvement process
4. Machinery Skills
5. Mental Health

Labour markets:

Ashfield's January 2025 figures show that we had 3.9 percent or 3010 people of working age as claimants. This is a marginal improvement from December 2024, which had 3030 people in Ashfield as claimants. While this rate is higher than the East Midlands average of 3.6 percent it is lower than the UK average of 4.1 percent .

More Economic data for Ashfield District can be found on the NOMIS website:

• website: Labour Market Profile - Ashfield - NOMIS website

Last updated: 21 February 2025