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UK inflation steady at 3% in February before energy shock from Iran conflict

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Amidst tumbling energy costs and a fierce price war among supermarkets, food price inflation in the UK has reached its lowest level in almost two years, offering a respite to households grappling with stretched budgets.

UK inflation remained unchanged at 3% in the year to February, offering a brief period of stability before economists expect a renewed surge in price pressures driven by the Middle East conflict.

Figures from the Office for National Statistics (ONS) show that annual inflation held steady following months of gradual decline, with rising clothing prices offset by lower fuel and alcohol costs.

However, the data was collected before the escalation of the US-Israel conflict with Iran,  an event that has already triggered sharp increases in global energy prices and is widely expected to feed through into higher inflation in the months ahead.

The main upward pressure on inflation in February came from clothing and footwear, where prices rose by 0.9% over the year. This marked a reversal from the previous month, when clothing prices had shown no increase.

ONS chief economist Grant Fitzner said the rise reflected typical seasonal pricing dynamics, but also highlighted the underlying volatility within the inflation basket.

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“At the same time, falling petrol costs and discounted alcohol helped offset some of these increases,” he added, noting that alcohol and tobacco inflation reached its lowest level since early 2022.

While fuel costs helped keep inflation in check in February, that trend has already begun to reverse.

The ONS reported that petrol prices were at their lowest level since June 2021 during the data collection period, with average prices around 131.6p per litre. Since then, wholesale oil prices have surged, pushing pump prices significantly higher.

The price of crude oil has risen sharply following disruptions to global supply chains and shipping routes, particularly through the Strait of Hormuz — a key artery for global energy markets.

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This shift is expected to have a cascading effect across the economy, increasing costs not only for transport but also for manufacturing, food production and leisure services as businesses pass on higher input costs.

For many companies, the impact is already being felt.

James Palmer, who runs a bus company in Essex, said fuel costs have risen dramatically in recent weeks, creating uncertainty and forcing difficult decisions.

“Three weeks ago we were paying around £1.21 per litre, now it’s closer to £1.86,” he said, highlighting the speed of the increase. Combined with rising wage costs, he warned that price rises for customers are becoming unavoidable.

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“It’s the unpredictability that’s worrying,” he added. “We don’t want to let people down, but we may have no choice.”

Economists expect inflation to rise significantly over the course of 2026, with some forecasts suggesting it could peak at around 4.6% if energy prices remain elevated.

This would mark a reversal from the recent trend of easing inflation and could complicate monetary policy decisions for the Bank of England, which had previously been expected to begin cutting interest rates.

Instead, markets are now pricing in the possibility of further rate increases to contain inflation, a move that would place additional pressure on households and businesses.

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The inflation data also comes as wage growth shows signs of slowing. Earnings excluding bonuses rose by 3.8% annually,  still ahead of inflation for now, but vulnerable to being overtaken if price growth accelerates.

A renewed squeeze on real incomes could weigh heavily on consumer spending, further slowing economic growth.

Chancellor Rachel Reeves said the government is taking steps to ease the cost of living, including measures to stabilise food prices and improve long-term energy security.

However, economists warn that global factors, particularly energy markets,  may limit the effectiveness of domestic policy interventions.

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The February inflation figure represents a moment of calm before what could be another period of turbulence.

With energy prices rising, supply chains under strain and interest rate expectations shifting, the UK economy faces a delicate balancing act,  one where inflation, growth and living standards are all tightly interconnected.

For now, inflation may be stable. But the forces shaping its next move are already in motion.


Jamie Young

Jamie Young

Jamie is Senior Reporter at Business Matters, bringing over a decade of experience in UK SME business reporting.
Jamie holds a degree in Business Administration and regularly participates in industry conferences and workshops.

When not reporting on the latest business developments, Jamie is passionate about mentoring up-and-coming journalists and entrepreneurs to inspire the next generation of business leaders.

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Tostitos to launch guacamole dip

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Veeco Q1 2026 slides: AI demand fuels growth outlook despite earnings miss

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Leading Change in Higher Education

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Leading Change in Higher Education

How a First-Generation Student Became a Higher Ed Leader

David Shein did not start his college journey with a clear plan.

“I was a first-generation college student before we knew what that meant,” he says. “I didn’t have a roadmap.”

That early experience shaped his career. It gave him a clear focus. He wanted to make college easier to navigate for others.

Over the next 30 years, Shein became a leader in higher education. He built systems that helped students succeed. He also helped colleges rethink how they support them.

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Early Life and Education: Building Work Ethic Early

Shein started working young. He split a newspaper route with his brother. Later, he worked in stores, libraries, and even a cemetery.

These jobs taught him discipline and independence.

In school, he joined debate and theater. He then attended SUNY Oswego. He studied Philosophy and Political Science and graduated magna cum laude.

He continued his studies at Bowling Green State University before moving to the CUNY Graduate Center. There, he earned his PhD in Philosophy..

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His academic focus shaped how he thinks about systems and ideas.

Early Career: Learning How Colleges Really Work

While in graduate school, Shein began working at Lehman College.

He served as Coordinator of the Core Curriculum and led the tutoring center. This gave him direct insight into student needs.

“I worked closely with faculty and administrators to build connective tissue across academic and student affairs,” he says.

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That idea of “connective tissue” became central to his work.

He saw that many students struggled not because of ability, but because systems were disconnected.

Bard College Career: Building Systems That Scale

In 1999, Shein joined Bard College. He was hired to create a writing and tutoring center. He also became the college’s first disability support provider.

From the start, he focused on building structures, not just programs.

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Over time, he took on leadership roles, including Vice President for Student Success and Network Integration.

He also taught in the Philosophy department and First-Year Seminar.

But his biggest impact came from what he built.

He founded the Learning Commons. He launched Disability Support Services. He helped create the Center for Student Life and Advising.

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Each of these programs addressed a real gap.

“At the core of this work is a commitment to making the full college experience accessible,” he says.

Program Development and Innovation in Higher Education

Shein’s work went beyond campus services.

He helped secure accreditation for new programs and partnerships.

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He played a role in extending the Clemente Course in the Humanities to new communities, bringing college-level learning to underserved populations.

These projects reflect a clear pattern.

He identifies problems. Then he builds systems that last.

“It’s about helping students connect with their college experiences in ways that impact their lives beyond their time in university,” he says.

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Global Education and Fulbright Recognition

Shein’s work extended into international education.

He supported dual-degree partnerships and global programs across Bard’s network.

He also worked on Bard’s online Global Degree program. This expanded access to students around the world.

His efforts helped connect students across countries and cultures.

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In 2019, he received a Fulbright scholarship for his work in international education.

This recognition highlighted his long-term impact in the field.

Mentorship and Student Success Outcomes

Throughout his career, Shein advised hundreds of students.

Many of them went on to earn major awards, including Fulbright scholarships.

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But for Shein, outcomes are not just about recognition.

“It’s about helping students participate in meaningful ways in what can feel like an alien environment,” he says.

His focus has always been on engagement and belonging.

Life Beyond Work: Staying Grounded

Outside of his professional life, Shein stayed active in his community.

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He coached youth soccer and supported Model UN programs when his children were younger.

Today, he spends time fishing, traveling, and writing. He also volunteers at his local public library.

He participates in the Watershed Community Amphibian Migration Project, helping protect local wildlife.

These activities reflect his broader approach. Stay involved. Stay connected.

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What David Shein Is Doing Now

Upon retiring from Bard College, Shein retired from Bard College, he began working as an independent educational consultant.

His work now focuses on helping institutions improve advising systems, program design, and student support.

“I’ve spent my career helping students navigate environments that can feel unfamiliar,” he says.

That mission continues in his current work.

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Why David Shein’s Work Matters in Higher Education

Higher education is still evolving. Many students continue to face barriers.

Shein’s career offers a practical model.

He focused on building systems, not just ideas. He connected academic and student services. He expanded access through new programs.

Most importantly, he kept the student experience at the center.

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For someone who started without a roadmap, he has helped create one for others.

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Protein Works hails record revenues in ‘pivotal and transitional year’ as German sales grow

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Business Live

Company moved to new Liverpool campus

Laura Keir, CEO at Protein Works, at the company's Liverpool base

Laura Keir, CEO at Protein Works, at the company’s Liverpool campus(Image: Lorne Campbell / Guzelian)

Protein Works has reported record revenues in a “pivotal and transitional year” for the growing nutrition specialist.

The Liverpool business reported revenue of £55.1m for the year to August 31, 2025, up from £50.7m in 2024.

That year saw the company move into its new “state-of-the-art, vertically integrated” PW Campus in south Liverpool. In her report attached to the accounts filed on Companies House, CEO Laura Keir said: “The project was entirely self-funded, without external financing or additional debt. The directors consider this a meaningful demonstration of operational discipline and balance sheet strength.”

Pre-tax profit fell from £8.9m in 2024 to £7.2m in 2025, which directors say was in line with expectations in “a year of transition and sustained growth”.

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The directors’ report for parent company Class Delta added: “Continued UK growth was supported by good performance in our strategic international markets, which continue to build scale as we focus investment behind the markets that offer the clearest path to meaningful size outside the UK.

“The underlying international trajectory reinforces the directors’ view that the brand has genuine cross-border portability and they’re pleased an EU based 3PL (third-party logistics) re-platforming is also complete.

“Growth continues to be underpinned by a differentiated brand proposition built around taste leadership, science-backed ingredients and healthy habit-forming product formats that fit naturally into customers’ daily routines. Our core range of complete meal and protein shakes, plus growing savoury meals category, supports sustained engagement and high repeat purchase rates across our customer base

“This record performance was delivered through a period of significant internal change and against a challenging macroeconomic backdrop, which the directors consider a credible reflection of the resilience of the operating model and the capability of the team.”

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In a further update on its results, Protein Works added that over the year the business had seen its EBITDA margin improve by two percentage points.

It said international revenue had grown 15% in FY25, with Germany the fastest-growing market. And it hailed a “broadening” customer base, with women now accounting for 55% of UK customers and with more than half of its customers aged under 40.

Laura Keir said: “After 13 years of uninterrupted growth, the standards we set ourselves continue to rise, and I’m incredibly proud of how the team has delivered again in 2025. This year has been the most significant operational year in the company’s history, setting out to do three hard things at once: grow the business, move into a new facility, and kick off a brand re-launch, and I’m very proud to say, we did it! That we delivered record revenue and our best-ever margin performance through all of it reflects the depth of the team we’ve built and the underlying strength of what we’ve created over 13 years.”

Nicola McQuaid, partner at YFM, the private equity backers of Protein Works, added: “This is a business that has consistently delivered on its ambitions, and it’s a privilege for YFM to support the team. Record revenue and improved margins, achieved through a year of major operational change, speak to the quality of leadership Laura and the team have delivered.”

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JPMorgan Chase-led group reins in credit

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JPMorgan Chase-led group reins in credit

The JPMorgan Chase & Co. building before the ribbon cutting ceremony, at the firm’s new headquarters at 270 Park Avenue, in New York City, U.S., Oct. 21, 2025.

Eduardo Munoz | Reuters

A JPMorgan Chase-led group of banks cut their exposure to a private credit fund co-managed by KKR days before the asset manager announced it was spending $300 million to prop up the troubled vehicle.

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The fund, FS KKR Capital Corp., said Monday in a release that KKR will inject $150 million into the fund as equity and spend another $150 million to buy shares from investors who want to exit.

Those moves, labeled “Strategic Value Enhancement Actions” by the fund, came after the JPMorgan-led group on May 8 slashed its credit line by $648 million, or about 14%, to $4.05 billion. Some lenders may have exited entirely rather than extend their commitments, according to the filing.

The fund, co-run by KKR and the alternative asset manager Future Standard and often referred to by its ticker, FSK, has become one of the most visible fault lines in the private credit story. Its shares have plunged by nearly half over the past year and trade at a deep discount to the fund’s net asset value.

In March, Moody’s downgraded FSK’s ratings to junk amid mounting stress in the portfolio. Since then, loans to software maker Medallia and dental services firm Affordable Care have stopped paying interest, executives said Monday.

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FSK said that it had losses of $2 per share in the first quarter, or about $560 million in total losses given the roughly 280 million share count, as the fund’s net asset value fell about 10%.

“Our first quarter decline in net asset value was driven by investments which have impacted prior quarters, certain new non-accrual assets, and the impact of market-driven spread widening,” CEO Michael Forman and President Daniel Pietrzak said in a release.

“We believe FSK’s current stock price underappreciates the long-term value associated with FSK’s investment portfolio and the KKR Credit platform,” they added.

FSK loans that are no longer generating income jumped to 8.1% by the end of the first quarter from 5.5% at yearend, the fund said.

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Further to fall?

Besides cutting its credit line, the JPMorgan-led group also raised interest rates on the remaining facility and gave the fund more room to absorb losses without triggering a default.

The latter move, lowering the minimum shareholders’ equity floor from $5.05 billion to $3.75 billion, gives FSK more breathing room. But it also indicates that lenders believe the firm’s assets have further to fall.

The FSK credit facility was funded by a syndicate of banks led by JPMorgan as administrative agent, a role that typically includes coordinating lender communications and amendment negotiations. ING Capital served as collateral agent, while the other participating lenders were not named in the filing.

JPMorgan, the largest U.S. bank by assets, has made broader moves to insulate itself from private credit turmoil, in part by marking down the value of private credit loans held as collateral on its own books, CNBC reported in March. Many of those marked-down loans are to software companies facing possible disruption from artificial intelligence.

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Besides the $300 million that KKR is spending to support FSK, the fund’s board also authorized a separate $300 million share repurchase program, and KKR agreed to waive half its incentive fees for four quarters.

FSK, which lends to private, middle-market U.S. companies, became the second-largest publicly traded business development company, or BDC, when it was formed through a merger of two predecessor funds in 2018.

The fund’s largest single category of loans is for software and related services, which made up 16.4% of exposure at yearend.

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