Category: 3. Business

Stuart Morrison, Research Manager, British chambers of Commerce

The latest Quarterly Economic Survey (QES)[1] from the BCC’s Insights Unit once again highlights price pressures as a central concern for UK businesses. Just over half (52%) of firms report that they expect to raise prices over the coming months, reflecting ongoing cost challenges. While the QES is not designed as a formal inflation forecast, its price expectations measure has, over time, proved to be a useful barometer of inflationary pressure in the wider economy.

To understand what the Q4 2025 results are telling us, it helps to place them in a longer-run context.

What the QES price expectations measure captures

Each quarter, the QES asks firms whether they expect to increase, decrease, or hold prices over the next three months. The results are usually presented as the proportion (or net balance) of businesses expecting price rises. This is a forward-looking indicator, rooted in firms’ own assessments of costs, margins, and market conditions.

Crucially, the measure reflects intentions, not outcomes. Businesses may plan to raise prices but later adjust those plans in response to weak demand or competitive pressure. For that reason, QES price expectations should be read as a signal of inflationary momentum, not a point forecast for CPI.

A historic perspective

Looking back over the decades of QES data, a clear pattern emerges. Periods when a large share of firms report plans to raise prices have tended to coincide with, or slightly precede, periods of elevated UK inflation. Conversely, when price expectations in the QES have eased, official inflation has usually followed suit with a lag.

This relationship has been especially visible since the pandemic. As supply chains tightened, energy prices surged, and labour costs rose, QES price expectations climbed to historically high levels. In Q2 2022, 65% of QES respondents said that they expected their prices to rise. By October of that year, CPI inflation had peaked at 11.1%. When those pressures began to unwind, the proportion of firms planning price increases also fell, broadly tracking the disinflation seen in official data.

Source: BCC QES Q4 2025

The link is not mechanical or perfectly timed. Inflation is shaped by many forces beyond business pricing plans, including global energy markets, exchange rates, fiscal policy, and monetary conditions. But the direction of travel in the QES has consistently aligned with the direction of travel in inflation.

What makes the QES a useful indicator

The strength of the QES lies in its timeliness and breadth. It captures real-time intelligence from thousands of firms across sectors and regions, often well before official statistics are available. For policymakers, analysts, and businesses, this provides early insight into whether price pressures are building or easing on the ground.

At the same time, history shows why caution is warranted. QES price expectations tend to be better at signalling whether inflationary pressure is present than at predicting how high inflation will go or how quickly it will fall. In periods of weak demand, firms’ ability to pass on costs can be constrained, even when cost pressures are intense.

Interpreting the Q4 results

Against this backdrop, the Q4 QES results suggest that inflationary pressure remains embedded in the business environment. While expectations are below the peaks seen during the height of the inflation surge, they remain elevated by historical standards. This points to ongoing cost-push pressures, particularly from labour, energy, and regulatory costs, rather than a renewed acceleration in demand.

As we move into 2026, the central question is likely to be whether businesses can absorb these persistent costs without passing them on. If not, inflation could remain a defining feature of the UK economy.

The historic relationship between QES price expectations and official inflation suggests that this persistence matters. Elevated expectations tend to be consistent with inflation remaining above target for longer, even if headline rates continue to ease gradually.

What this means for inflation in 2026

The lesson from the past decade is not that the QES “predicts” inflation, but that it offers an early and reliable signal of inflationary stress within the business community. The Q4 results reinforce the view that, while inflation has come down from its highs, the journey back to more stable price growth is unlikely to be smooth.

Looking ahead, persistently elevated price expectations have important implications for the policy and economic outlook. For the Bank of England, they suggest a case for caution on the pace of interest rate cuts, even as headline inflation continues to ease. If firms still expect to raise prices, underlying inflationary pressure may prove more stubborn than recent data alone imply.

For policymakers, this underlines the importance of tackling the structural drivers of costs facing firms. For businesses, it highlights a trading environment where pricing decisions remain difficult, margins remain under pressure, and uncertainty persists.

As ever, the QES provides a timely snapshot of these realities, and a reminder that inflation is not shaped by nebulous statistics, but by the decisions businesses are faced with every day.

Further reading

QES Q4 2025: https://www.britishchambers.org.uk/news/2026/01/more-clouds-gathering-over-business-confidence/

BCC Insights Unit publications: https://www.britishchambers.org.uk/insights-unit/publications-and-commentary

[1] https://www.britishchambers.org.uk/news/2026/01/more-clouds-gathering-over-business-confidence/

The Pakistani rupee (PKR) closed in green against the US Dollar (USD) for the 76th consecutive day on Friday.

Meanwhile, it posted gains against all of the other major currencies during today’s session.

The PKR closed at 280.02 after gaining two paisas against the US Dollar today.

Other Currencies

The PKR was green against all of the other major currencies in the interbank market today.

It again ended on a positive note against both the UAE Dirham (AED) and gained one paisa against the Saudi Riyal (SAR).

It gained 43 paisas against GBP and 60 paisas against the Australian Dollar.

In a new report published today in the journal Nature Plants, researchers based at more than 50 botanic gardens and living plant collections warn that a patchwork of incompatible, or even absent, data systems is undermining global science and conservation at a critical moment.

They call for a unified and equitable global data system for living collections to transform how the world’s botanic gardens manage and share information. This would enable them to work together as a ‘meta-collection’ to strengthen scientific research and conservation efforts.

Climate change, invasive species, habitat loss and increased global movement of plant material all require rapid access to high-quality, trusted information about living plants. Achieving this depends on a shared culture of open, accurate, and affordable data – allowing living collections of all sizes, particularly in the Global South where much of the world’s biodiversity is located, to participate on equal terms.

Curator of Cambridge University Botanic Garden Professor Samuel Brockington, who led the work together with researchers at Botanic Gardens Conservation International, said: “The digital infrastructure needed to manage, share, and safeguard living plant diversity wasn’t designed to operate at a global scale.”

He added: “We’ve built an extraordinary global network of living plant collections, but we’re trying to run twenty-first-century conservation with data systems that are fragmented, fragile, and in many cases inaccessible to scientists and conservationists working where most biodiversity originates. We urgently need a shared data system so the people managing collections can work together as a coordinated whole.”

Thaís Hidalgo de Almeida, Curator of Living Collections, Jardim Botânico do Rio de Janeiro and a co-author of the report, said: “Having an integrated and equitable global data ecosystem would greatly help us address urgent conservation needs in biodiversity-rich countries like Brazil, making our work faster, more collaborative, and more effective.”

Scientific research in many areas depends on accurate, well-documented living plant material.  As climate change accelerates extinction risk, living plant collections are increasingly used to support species and ecosystem restoration, and climate-adapted urban planting.

Yet many collections remain undigitised, and those that are often rely on incompatible systems shaped by institutional or commercial priorities rather than shared standards. As a result, vital information on threatened species, climate resilience, provenance, and legal status cannot be shared efficiently between institutions or across borders.

“In healthcare, fragmented and proprietary data systems are recognised as a serious risk and the focus of major public investment,” said Brockington. “In plant conservation, we face the same problem, but without treating the data as critical public infrastructure.”

At least 105,634 plant species – representing around one third of all plant species in the world – are grown in the world’s 3,500 botanic gardens. As much as 40% of the world’s plant diversity is at elevated risk of extinction and these living collections form a critical safety net against that.

Organisations like Botanic Gardens Conservation International (BGCI) have already established the foundations of a better data system but the researchers say coordinated, considered investment is now needed to create a long-lasting and trusted resource.

Paul Smith, Secretary-General, BGCI and a co-author of the report, said: “In an era of accelerating biodiversity loss, harnessing the full conservation potential of living collections requires a step-change in how collections data are documented, standardised and connected through a global data ecosystem. This publication, supported by more than fifty gardens worldwide sets the stage for achieving that transformation.”

Last year, Brockington announced his previous report showing how living collections metadata could be used to give global insights into the acquisition and conservation of the world’s plant diversity.

References:

Brockington, S.F. et al: ‘High-performance living plant collections require a globally integrated data ecosystem to meet twenty-first-century challenges.’ Nature Plants, Jan 2026. DOI: 10.1038/s41477-025-02192-6

Cano, A. et al: ‘Insights from a century of data reveal global trends in ex situ living plant collections.’ Nature Ecology and Evolution, Jan 2025. DOI: 10.1038/s41559-024-02633-z