Inflation data out at 7am on Wednesday – answer as if inflation has gone UP

The Bank of England faces an impossible choice on Thursday given today's inflationary news. Either to cut rates and validate inflationary pressure, or hold them and strangle what little economic growth remains. Mortgage rates will stay elevated either way, punishing homeowners for fiscal policies they never voted for, and creating that perfect storm for property developers like myself.

The inflation uptick is not economic accident but a policy consequence, the predictable result of a Chancellor who treats SME businesses like us as a cash machine for her fiefdoms. Reeves spent months loading employers with national insurance hikes, minimum wage increases, and regulatory burdens, and will now predictably act surprised when these costs appear in shop prices. The public sector wage bonanza she unleashed is now feeding through to services inflation, while her tax raids on business investment have weakened productivity growth that might have offset rising costs.

I’m a British entrepreneur who built and sold a generative AI company, and inflation going up isn’t a mystery — policy driven.

The UK is running the economy like a produce store, not a farm. Count what’s on the shelves, panic about waste, raise prices — but forget to plant anything new.

We’ve had the tax rises. Now inflation’s up again. That means rates stay higher for longer, mortgage costs remain painful, and small businesses get squeezed not because they’re reckless, but because capital is expensive and growth is weak.

For my business, it means tighter budgets, longer sales cycles, and customers demanding proof, not promises. The silver lining? It turbocharges demand for automation and AI — when money’s tight, inefficiency is the first thing to go.

If government is obsessed with money in vs money out, fine — but then reward growth. Give people on benefits small loans and mentoring to start businesses. Reward UK taxpayers who create UK jobs. Even incentivise fewer NHS visit

Rising inflation is not a surprise. It is the cost of pretending the pressure had passed. Prices move up when costs stay sticky and households are forced to spend more on essentials, not because people suddenly feel flush. Energy, food and services do not fall neatly just because demand cools. For the Bank of England, higher inflation keeps rates on hold and pushes any cut further out. Another hike still looks unlikely, but borrowers should not expect quick relief. Mortgage rates will remain stubborn, rewarding those with clean credit while others are priced out. Inflation rising again exposes the same fault line. Policy decisions land softly on the well cushioned and hardest on those already stretched. That is not accidental.

So inflation is up. The only people surprised are the ones still clinging to the fantasy that it's driven by consumer indulgence rather than the rising cost of staying alive. Let’s be clear: this isn't an economy overheating from luxury spending; it is an overheating cost of living driven by public goods, energy and essentials.

We are watching a dogmatic obsession with the 2% inflation target hammer disposable income while real wage growth continues to be outpaced by reality. If the BoE reacts by reaching for their dusty neoliberal handbook to hike rates, or even just hold them painfully high, they are misdiagnosing the disease. You cannot cure supply-side inflation by punishing mortgage holders and suffocating demand.

For my industry, cloud services and automation don't fluctuate wildly with CPI, so the direct operational hit is minimal. But that’s irrelevant if the wider market is being strangled. A rate increase now wouldn't be 'prudent'; it would be an act of economic self harm.