This morning brought a genuine piece of good news for UK businesses and the numbers actually do make perfect sense. The Office for National Statistics confirmed that UK inflation fell to 2.8% in April which is meaningfully below the 3% forecast and down sharply from 3.3% in March. At the same time, the government issued a new licence allowing the import of diesel and jet fuel refined from Russian oil in third countries as a direct response to the global supply crunch triggered by the closure of the Strait of Hormuz.
These two items are the current headlines that impact the figure of inflation and go hand in hand. Taken together, they matter hugely for small businesses.
But the honest read might actually be more nuanced than the headlines are actually suggesting. Business owners who plan on optimism alone are still likely to find 2026 a difficult year ahead.
The Inflation Number Is Better Than Expected. But It Should Come With Small Print Disclaimers
The April CPI figure of 2.8% is a real win. It beat consensus forecasts by a notable margin, driven primarily by the Ofgem energy price cap reduction that came into force on 1 April, effectively cutting the average household's gas and electricity bill by around £10 a month. Smaller increases in water bills and road tax than seen in previous years also helped pull the rate down, as did falling food prices.
For small businesses, lower energy prices translate fairly directly. Operating costs such as lighting, heating, refrigeration and machinery have been a persistent hole in finances over the past three years. Any sustained easing in those costs gives back some certainty of control over margins that has been quietly eroded by external factors since 2022.
The trouble is the word "sustained." Economists are already flagging that this reprieve may be short-lived. The Iran conflict has effectively closed the Strait of Hormuz and there isn’t a clear timeframe or plan as to when this will open. The waterway contains a significant share of global oil transits. Petrol and diesel prices actually rose during this time despite the fact that overall inflation fell. The Bank of England has signalled it is watching closely for secondary effects, which are the indirect impacts this has.
They are wage demands rising to catch up with previous price increases, and businesses passing higher input costs on to consumers. Senior economists at Schroders have suggested inflation could climb back above 4% before the end of the year, not exactly the news we’d want to hear.
For planning purposes, 2.8% is just a figure to be cautious about and should not act as the floor to be confident from. The signs are all signalling that this is a temporary downward spike in the trend.
Careful modelling and financial planning ahead, utilising the impacts if inflation really went to the worst case scenario would be wise to ensure all decisions are based on highly probably assumptions, rather than celebrating short term wins.
What the Russian Oil Sanctions Waiver Actually Does
The second story is easy to misread. The UK has not broadly lifted sanctions on Russia. What it has done is issue a general licence, effective from today and of indefinite duration, though subject to periodic review, that allows the import of diesel and jet fuel that has been refined from Russian crude oil in third countries such as India and Turkey.
The key word is diesel and jet fuel.
This is a targeted, pragmatic response to a specific supply crisis. European jet fuel prices more than doubled after the Iran conflict began; while they have since fallen back, they remain around 50% above pre-conflict levels. Petrol at the pump hit 152.52p per litre earlier this week, the highest since the start of the war. The waiver gives UK importers access to a wider pool of refined fuel supply, which should — in theory — ease upward pressure on diesel and jet fuel prices by preventing demand from dramatically outstripping what's available through non-Russian channels.
For small businesses, the practical effect is most immediate in logistics and transport. Haulage costs, last-mile delivery charges, and fleet fuel bills have all been climbing. Greater supply availability in the diesel market should slow that climb, even if it doesn't reverse it overnight. Businesses in food and drink distribution, construction, and field services are also likely to feel a marginal benefit.
On the other hand, businesses that may be operating with oil derived inputs such as Agriculture, Fashion, Manufacturing may not feel the benefits as such. Fertilisers and petrochemical supplies haven’t been eased. The costs are outside of the relief entirely.
The government has been careful to frame this as a "flexibility" within an overall tightening of the sanctions regime. New restrictions on Russian uranium imports, LNG transport, and maritime services were announced alongside the waiver. The political optics are deliberately balanced to not open the doors to a sanctioned economy, but to carefully extract imports from countries that have already bought it.
The Honest Forecast is Stability With Conditions Attached
The most useful thing a business can take from today is not a specific number, but a posture. The conditions for relative stability exist.
However, they are conditional. And the conditions are geopolitical.
The Strait of Hormuz reopening, the Iran conflict de-escalating, or the waiver on Russian-derived fuel being revoked could each shift the picture significantly. Any of these would put upward pressure back on energy and logistics costs, and given where inflation sat just a month ago at 3.3%, the distance back to discomfort is not large.
The businesses that will navigate this best are those treating today's data as a window for preparation rather than a signal to relax. Practically, that means a few things.
Lock in deals where you can. If you are currently on variable energy tariffs or rolling fuel contracts with your logistics providers, this is a reasonable moment to explore fixed-rate options. You have a window of options for buying stability, not necessarily a lower price. A fixed cost estimate is easier to plan for than a variable cost estimate.
Model your scenarios. Build at least two cost forecasts into your planning for the rest of 2026. One where inflation hovers in the 2.8–3.5% range and fuel prices remain broadly stable, and one where the Iran situation worsens and CPI climbs above 4% by the end of the year. Know in advance which levers you can utilise for leverage in each scenario. They could be pricing adjustments, supplier renegotiations, or diversification to the product mix.
Don't over rely on the supply-side relief. The Russian oil waiver helps the supply picture for diesel and jet fuel, but it is explicitly temporary in spirit even if indefinite in current wording. The government has reserved the right to revoke it, and political pressure, particularly from Europe, may yet force a change of course.
The Bottom Line
Today is genuinely better than yesterday looked like it was going to be. A sharper than expected fall in inflation and a deliberate move to stabilise fuel supply gives small UK businesses a more manageable environment in the near term than what it seemed to be a month ago.
But ask yourself to remember these two things at once. Relief that conditions have improved and clear awareness that the improvement is fragile.
Plan for the number you have. Prepare for the number you might get. That is not pessimism. It is the correct way to ensure a stable business.