After inflation rose to 2.3%, East Midlands Chamber has given its reaction.
The latest estimated figures published by the Office for National Statistics are above the Bank of England’s target of 2% and higher than economists anticipated.
East Midlands Chamber Director of Policy and Insight Richard Blackmore said: “While we’ve seen a trend of gradually falling inflation from the sky-high level we were at not all that long ago, news of a return to a level greater than the Bank of England’s 2% target will frustrate businesses already grappling with price pressures, the high cost of doing business and bracing for the impact of decisions announced in the Autumn Budget.
“East Midlands businesses highlighted inflation as their second biggest concern after corporate taxation in our most recent Quarterly Economic Survey. The new figure doesn’t come as much of a surprise, when you factor in the huge cost of energy, but it does cast a shadow of doubt on a lower interest rate being announced next month. For businesses having to work out how they’ll find funds for higher NI contributions and a higher national living wage, as revealed in the Autumn Budget a few weeks ago, any additional pressure to increase prices, harm competitiveness and keep borrowing high, is not helpful.
“We’ll shortly publish the findings of research we’ve carried out among a huge cross section of businesses in the East Midlands on their sentiment following what we know was a tough Budget for businesses, looking at their concerns, growth projections and overall confidence in the light of the measures that were revealed. Those results will be shared with political leaders at both regional and national level.”
