It marks the first time inflation has been in single digits since last August, but it was higher than expected by economists, who had forecast a drop to 8.2% in April.

Mike Randall (pictured), CEO at Simply Asset Finance commented on the fall in inflation: “After a year of persistent rises, inflation could finally be starting its long-anticipated downward trend. Having endured months of rising inflationary pressures, a drop in the headline rate will be welcomed by businesses nationwide and could signal to more stable interest rates being on the horizon.

“For businesses it’s a small win but for some will have come a little too late. Business owners remain resilient, but many are still faced with soaring energy bills, funding issues, and the surging costs of running a business. While we’ve observed a slight decline in number of company insolvencies in the first quarter of this year, businesses still need targeted support to ensure their success, particularly as there is an estimated £22bn SME funding gap that still exists in the UK.”

Derek Ryan, Managing Director at Bibby Financial Services commented on how the inflation dip will affect small businesses: “Our recent research found 61% of SME leaders cited inflation as a top concern so today’s figures will come as a relief for small business owners, who have been hit hard by rising costs and reduced profitability.

“But it would be premature to assume we are out of the woods. After a year of damaging inflation, and with interest rates now at a 15 year high, the cost of doing business remains problematic. Many businesses are cash-strapped, struggling to pay back mounting loans, or even access the finance they need to survive. As a knock-on effect, bad debt and late payments are both rife throughout SME supply chains causing longer term issues.

“The UK’s small businesses are hungry to invest and to grow, but they need stability to help them do so. This means further security from the Government around the future of energy bills and a convincing response to tackling inflation. We may not be entering recession but we can’t rest on our laurels; fuelling small business resilience and confidence will be critical to getting the UK economy back on track.”

Neil Rudge, Head of Enterprise at Shawbrook, said: “Inflation continues to edge downwards offering further signs for optimism to SMEs that have faced down double-digit increases for nine consecutive months.

“SMEs have shown remarkable resilience in an economic climate characterised by low-growth and increasing borrowing costs which has disrupted growth plans and stifled expansions. Of course, challenges will remain; wage inflation and a difficult labour market continue to impact bottom-lines, and demand in some sectors is yet to see an uptick.

“However, this news will be a boost to confidence, and we’d expect to see increasing demand from SMEs exploring growth opportunities. While short-term many SMEs will still be managing low demand, challenging supply chains and potentially payment delays, long-term the outlook is optimistic and therefore they will need flexible yet stable and reliable solutions to fund their strategic initiatives. “