Inflation is back in the headlines, and if you run a business in Birmingham, you’ll have felt it before the Office for National Statistics confirmed it. The Consumer Prices Index rose to 2.9% in the 12 months to July 2026, up from 2.6% the month before — the first increase in the annual rate since March. Locally, Greater Birmingham Chambers of Commerce (GBCC) research found inflation is now the single most-cited pressure facing businesses in the region, with 28% of firms naming it as a top concern.
For any small business, that’s unwelcome news. But for Black-owned businesses in Birmingham, rising costs don’t land on a level playing field. Years of documented gaps in access to finance mean many Black entrepreneurs are heading into this squeeze with thinner cash reserves and fewer borrowing options to fall back on. This piece looks at what’s driving the rise, why it hits Black-owned businesses differently, and — most importantly — the practical steps and local support you can act on right now.
What’s actually happening with inflation
The rise to 2.9% was driven mainly by one thing: energy. Ofgem’s price cap on household gas and electricity went up by 13% on 1 July, adding around £221 a year to the typical household bill. Businesses don’t get the protection of that household price cap, so many are exposed to even steeper energy cost rises on their own contracts.
Paige Bowyer, policy and research analyst at GBCC, put it plainly: “Inflation rising to 2.9% in July is a reminder that the path towards lower and more stable prices remains uncertain, with businesses continuing to face a range of cost pressures… businesses remain exposed to higher costs, particularly as they are not protected by a household price cap.”
Nationally, the picture is the same. The British Chambers of Commerce says inflation is now the number one concern among the firms it represents, with 66% of businesses citing it as a worry in the second quarter of 2026. Margins are being squeezed hard enough that it’s already affecting investment and recruitment decisions.
Both GBCC and the BCC are now pushing for the Autumn Budget to deliver real relief — support on energy costs, business rates reform, and greater certainty for firms trying to plan ahead. Whether that materialises remains to be seen, which is exactly why it’s worth building your own resilience now rather than waiting on policy.
Why this hits Black-owned businesses differently
Here’s the part that generic small business coverage tends to skip over: inflation doesn’t just squeeze everyone equally and then let go. It squeezes hardest where the buffer is thinnest — and for Black-owned businesses, that buffer has been thinner for a long time, not by accident but because of documented, persistent gaps in access to finance.
The British Business Bank’s own research is direct about this. Its “Unlocking the Potential of Diverse Entrepreneurs” factsheet found that 20% of Ethnic Minority-led businesses were discouraged from even applying for finance in 2021, compared to just 8% of White-led businesses — often because they expected to be rejected, didn’t know where to find appropriate finance, or worried the process would be too much hassle. The same research found only 49% of Black entrepreneurs report meeting their non-financial business aims, compared to nearly 70% of White entrepreneurs.
That discouragement has roots. Research carried out for the Department for Business, Innovation and Skills following the 2008 financial crisis found that businesses with a Black African principal owner were 14.4% more likely to be rejected for a term loan than white-owned businesses, and 11.9% more likely to be rejected for an overdraft — and when Black African-owned businesses did secure an overdraft, they paid margins 2.12 percentage points higher than white-owned businesses on average. It’s a pattern from a previous downturn, but it’s exactly the kind of pattern that resurfaces whenever costs rise sharply and lenders tighten up, which is why it’s worth naming clearly now rather than assuming it’s history.
Put simply: if inflation is squeezing every small business’s cash flow this year, Black-owned businesses are more likely to be doing it with less access to affordable credit, less of a cushion built from previous rounds of funding, and less trust that a bank will back them if things get tight. That’s not a reason to panic — it’s a reason to be deliberate about where you look for support, and to use the resources that exist specifically to close that gap.
Practical steps to protect your margins right now
None of the following requires waiting for the Budget. These are things you can act on this month.
Get on top of your biggest fixed cost first: energy. Because business energy contracts aren’t protected by the household price cap, it pays to check when your current contract is due for renewal and get quotes early rather than rolling onto a default tariff. If you’re on a variable rate, ask your supplier directly what a fixed-term deal would look like now.
Revisit supplier contracts and payment terms. Inflation is squeezing your suppliers too, but that doesn’t mean every price rise passed to you is non-negotiable. A short, direct conversation about volume discounts, payment terms, or locking in a price for six months can genuinely help.
Price with intention, not panic. If you haven’t reviewed your pricing in the last six months, it’s worth doing the maths properly rather than guessing. Know your actual cost per product or service before you decide whether — and by how much — to adjust prices.
Build a smaller, sturdier cash buffer. Even setting aside a modest percentage of weekly takings specifically for cost shocks changes your negotiating position enormously, because you’re not making decisions from a place of pressure.
Apply for finance before you’re desperate for it. Discouragement is the single biggest barrier the British Business Bank identified — many Ethnic Minority-led businesses don’t apply because they assume they’ll be rejected. Applying while your business is stable, rather than waiting until cash flow is critical, significantly improves your options and your negotiating position.
Local support built specifically for Black-owned businesses
This is the part generic advice misses entirely: you don’t have to navigate this alone or figure out the finance system from scratch. Birmingham has real, active infrastructure built specifically for Black business owners.
GBCC Black Business Collective. A free subscriber network conceived and led by Black business leaders, chaired by Alex Cole (CEO of TIN Ventures) with Karl George MBE as honorary president. Members get access to quarterly Collective events, invitations to the wider Greater Birmingham Chambers of Commerce events calendar, and a quarterly digital bulletin featuring funding and business opportunities. Lloyds Banking Group and law firm Trowers & Hamlins are founding partners. If you’re not already subscribed, this is free and takes minutes to join via the GBCC website.
The Investment Readiness Accelerator. Delivered in partnership between the Black Business Collective and Oxford Innovation Advice, and backed by the Business Growth West Midlands Investment Readiness programme with funding from the UK Shared Prosperity Fund, this free programme was set up specifically to close the investment-readiness gap for Black-owned SMEs. It offers one-to-one mentoring, pitch refinement, investor introductions and tailored coaching to help high-growth Black-led businesses become genuinely investment ready. As Alex Cole put it when the programme launched: “Investment readiness is often a barrier — not lack of ideas.” Places are limited and allocated by application, based on growth potential and commitment, so it’s worth registering your interest via the Investment Readiness website sooner rather than later.
Start Up Loans. It’s worth knowing that around a fifth of all UK Start Up Loans go to Ethnic Minority entrepreneurs — a higher share than Ethnic Minority businesses make up of the overall SME population. If you’ve assumed a state-backed loan scheme “isn’t really for you,” the data says otherwise.
The bigger picture
Inflation at 2.9% is a national story. What it means for your business, your cash flow and your options isn’t the same story every business owner is reading — and it shouldn’t be treated as if it is. The gap in access to finance that Black entrepreneurs face isn’t a footnote to this moment; it’s a big part of why the same inflation figure lands harder on some businesses than others.
The encouraging part is that Birmingham has built real, funded, free infrastructure specifically to close that gap — from the Black Business Collective’s network and advocacy to the Investment Readiness Accelerator’s one-to-one support. None of it fixes the cost of energy or the price of stock overnight. But it does mean you’re not weighing up rising costs with fewer options than you should have. Use what’s already there.
Join the conversation
Want to talk through how rising costs are affecting your business with other Black business owners who understand exactly what you’re navigating? Join the Black Owned Birmingham Facebook group, where our community shares opportunities, recommendations and honest advice on running a business in this city: facebook.com/groups/blackownedbirmingham.
