Recent figures from the Office for National Statistics suggest that wage growth in the UK is beginning to ease. Between September and November, average pay growth slowed to 4.5%, with private sector wage increases falling to their lowest rate in five years. At the same time, the number of people on company payrolls dropped by 135,000, with retail and hospitality seeing some of the sharpest declines. On the surface, this might sound like dry economic data. But beneath the headlines, there are some very real implications for business owners. A slowdown that feels counterintuitive For many employers, particularly those who have struggled to recruit and retain staff over the past few years, the idea that slower wage growth could be “good news” feels odd. After all, rising wages usually mean happier staff and lower turnover. But from a wider economic perspective, slower wage growth reduces pressure on inflation. When wages rise quickly, people tend to spend more, pushing prices up. That is one of the reasons the Bank of England has kept interest rates high. With wage growth easing and inflation falling slightly, economists believe this increases the likelihood of interest rate cuts later this year. That matters for businesses because interest rates affect borrowing costs, cash flow, and confidence. Why private sector businesses are feeling the pinch The data also highlights a growing gap between public and private sector pay. Public sector wages rose by nearly 8%, while private sector pay grew at closer to 3.6%. For private businesses, this reflects a tougher trading environment. Costs remain high, consumer spending is under pressure, and many businesses are being more cautious about hiring. The fall in payroll numbers, even heading into the Christmas period when hiring is usually stronger, suggests businesses are choosing to do more with less. This is not necessarily a sign of panic, but it does point to a period of consolidation rather than expansion. What business owners should take from this For business owners, this data is not something to worry about, but it is something to be aware of. A few practical points to consider: Wage planning needs to be realistic. Automatic annual pay rises may not be sustainable in the current climate. Any increases should be tied to affordability, productivity, and long-term plans. Cash flow matters more than ever. Slower growth and higher borrowing costs mean keeping a close eye on forecasts, reserves, and commitments. Hiring decisions deserve scrutiny. Bringing someone on board is a long-term cost, not just a monthly wage. It is sensible to review whether roles are essential now or can wait. Interest rate changes could help later. While rates are expected to hold in the short term, the direction of travel may start to ease pressure on loans and finance later in the year. Staff communication is key. If pay rises are smaller or delayed, being open and honest helps maintain trust and morale. A reminder about context Economic headlines rarely tell the full story on their own. Slowing wage growth does not mean wages are falling, nor does it mean businesses should stop investing in their teams. What it does mean is that the post-pandemic surge in pay and demand is settling, and businesses are entering a more measured phase. Understanding that context helps owners make better decisions rather than reacting to headlines alone. How we can help At Inglis, we work with businesses to make sense of changes like these and understand what they mean in practice. If you would like help reviewing your payroll costs, planning pay increases, or sense-checking decisions around hiring and cash flow, we are always happy to talk things through. You can call us on 01904 787 973 or book a call with our team .

Social media seems, once again, to be ablaze with the famous question: How many r’s are in strawberry? It is one of those prompts that reliably resurfaces every few months, usually accompanied by screenshots of ChatGPT confidently giving the wrong answer. On the surface, it is a harmless curiosity. A bit of fun. But it also reveals something far more important about how AI works, and where its limitations still sit. It often looks like modern AI can accomplish any task. Want a fun marketing image? Easy. Need a blog post written? Done. Want to use AI to create a romantic song for your wedding anniversary? You’ll have it in seconds. Yet despite how magically the technology seems, AI still falls surprisingly flat when it comes to certain basic tasks. Tasks you would expect a seven-year-old to achieve with ease. It is amusing, and slightly baffling, to see ChatGPT struggle with something as simple as counting letters in a word. But it is not just ChatGPT being glitchy or careless. There are structural reasons why large language models struggle with certain words more than others. Take the question itself: how many r’s are there in the word strawberry? For most people, the answer is immediate. You picture the word, scan it, and count. Three. For ChatGPT, the process is completely different. It does not “see” words as letters in sequence. It predicts likely outputs based on patterns it has learned from enormous volumes of text. When asked, what answer does it give? Just a clear and confident: “two.” So, for all the billions in investment, the vast computing power, the pressure on global energy and water resources, and the near-mythical reputation AI now carries, it still cannot reliably answer how many r’s are in strawberry. That should give anyone pause before using AI for things that really matter. Why this matters for tax, finance, and professional advice The strawberry example is trivial, but the underlying issue is not. AI systems are designed to produce plausible responses, not guaranteed correct ones. When they get things wrong, they often do so with complete confidence. That is a dangerous combination in areas like tax, accounting, and compliance. With self-assessment deadlines approaching, it is tempting for business owners to ask AI questions such as: Can I claim this expense? Do I need to register for VAT? How should I structure my income to be more tax-efficient? AI can produce an answer quickly, and it will often sound reasonable. The problem is that it may be outdated, oversimplified, or simply incorrect for your specific circumstances. UK tax law is nuanced, highly contextual, and frequently updated. AI does not understand your full financial picture unless you give it every detail, and even then, it cannot apply professional judgement in the way a qualified adviser can. The same risk applies when using AI for business communications or financial decisions. Using AI to draft explanations, summaries, or documents without proper review can introduce subtle errors. A missed exception, a misquoted threshold, or an outdated allowance can all undermine confidence and potentially create problems later. Using AI safely and sensibly in practice AI is not useless. Far from it. But it needs to be used with care and clear boundaries. Here are a few practical guidelines help reduce risk: Treat AI as a starting point, not a final answer. It can help you think, outline, or draft, but it should never be the last word on technical matters. Always verify facts against authoritative sources, such as HMRC guidance, legislation, or professional manuals. Do not rely on AI for personalised tax advice. Review anything important before acting on it. If you would not be comfortable explaining it to HMRC, it should not be based on an unchecked AI response. Be especially cautious with deadlines, thresholds, and eligibility criteria. These are areas where AI errors are common and costly. AI can save time, spark ideas, and help with structure and clarity. What it cannot do, at least not yet, is replace professional judgement, accountability, or detailed technical understanding. If it can confidently miscount the letters in strawberry, it can just as confidently misstate a tax rule. The difference is that one is a joke on social media, and the other can have real financial consequences. How we can help At Inglis, we support individuals and businesses with clear, practical accounting advice you can rely on. We understand that tools like AI can be useful, but when it comes to tax, compliance, and financial decisions, having a trusted adviser still matters. If you would like a second opinion on a tax question, help making sense of your numbers, or reassurance that you are doing the right thing, we are always happy to talk things through. You can call us on 01904 787 973 or book a call with our team .