18 October 2016
The increase in UK inflation to 1.0 per cent will do little to ease the concerns of firms in Greater Birmingham over the impact of exchange rates, business leaders said today.
The rate for September was up from 0.6 per cent in August, according to figures from the Office for National Statistics (ONS).
It is the biggest monthly rise in the cost of household items in more than two years with rising prices for clothing, overnight hotel stays and motor fuels leading to the rise in the Consumer Prices Index.
Also released today was the latest Producer Price Index which showed prices of materials and fuels purchased by manufacturers rose 7.2% in the year to September. This is the third consecutive increase.
Henrietta Brealey (pictured), director of policy and strategic relationships at Greater Birmingham Chambers of Commerce, said: “While costs for UK manufacturers again saw significant increases in September, increases in the Consumer Prices Index remain relatively low.
“The rise in costs for UK manufacturers can largely be attributed to the fall in the value of sterling seen since the EU referendum.
“That CPI remains so low - significantly below the Bank of England’s target of 2 per cent inflation - suggests that increased costs for manufacturers and retailers importing products from abroad have yet to be passed on to consumers.
“Although, as the recent standoff between Tesco and Unilever aptly illustrated, the exchange rate is starting to have a real impact on the price of consumer products.
“Our own research, through our Quarterly Business Report, indicates that businesses in the region are increasingly concerned about the impact of exchange rates on their business. But confidence and growth remain robust, with the majority of local firms expecting turnover and profitability to increase over the next 12 months.
“We would encourage firms interested in understanding more about opportunities and options available when trading internationally to contact the Greater Birmingham International Business Hub.”