UK Financial Update April 2025: Inflation, Interest Rates & Business Confidence
What’s shifting, what’s staying, and what it means for your business.
At Demsa Accountants, we believe staying informed means staying ahead.
Our UK financial update April 2025 explores easing inflation, a possible Bank of England pivot, and shifting global trade signals.
Let’s break down what actually matters for UK businesses right now.
Inflation: Easing, but not gone!
UK inflation, measured by CPIH, stood at 3.4% in March 2025, a slight cooling compared to early-year spikes but still well above the Bank of England’s 2% target.
It’s a reminder that while pressure may be easing, we’re not out of the woods just yet.
Food prices in particular are still rising, driven by higher employer costs linked to wage increases and tax changes.
Interest Rates: Cut on the horizon?
The Bank of England held rates at 4.5% in March but markets are betting on a cut to 4.25% as early as May.
With inflation softening and global trade risks mounting, many now expect rates to fall to 3.5% or lower by year-end.
For UK businesses, that’s not just a number, it’s a window to:
- Restructure debt
- Plan new investments
- Reforecast cash flow with confidence
Business Confidence: A tale of two surveys
Not all businesses are feeling the same.
According to ICAEW, confidence dropped below zero for the first time in over two years, with tax hikes and US trade tensions cited as key concerns.
Meanwhile, Lloyds’ Business Barometer showed confidence dipped 10 points to 39%, but that’s still well above the long-term average of 29%.
So, what should businesses focus on now?
Here’s what we’re advising our clients to watch in Q2:
- Be rate-ready: Even a 0.25% drop can shift the numbers in your borrowing model.
- Watch your customers: Confidence is fragile. Responsive pricing and flexible offerings matter more than ever.
- Plan for slower growth: Use this time to strengthen not just stretch.
At Demsa Accountants, we turn numbers into next steps. Our UK financial update April 2025 is here to help you rethink strategy, let’s talk.
Want more updates like this?
We’ll be back next month with another fresh breakdown, until then, stay curious, stay prepared, and stay ahead.
Already thinking ahead?
Make sure you’re not leaving money on the table. Our guide on the 5 tax mistakes small businesses should avoid is a smart place to start.
Best regards,
The Demsa Accountants Team
