13 December 2016
Consumers must brace themselves for price rises across the board following today’s announcement that inflation grew to a two-year high of 1.2 per cent in November, business leaders warned.
Greater Birmingham Chambers of Commerce (GBCC) said the rise in the prices of clothing, motor fuels and a variety of recreational and cultural goods and services, most notably data processing equipment, were the main contributors to the increase in the Consumer Price Index (CPI).These upward pressures from 0.9 per cent in October were partially offset by falls in air and sea fares.
The Producer Price Index (the price of goods bought and sold by UK manufacturers), rose again in the year to November 2016. This is the fifth consecutive increase following two years of falls and the largest increase since April 2012. Between October and November, total output prices showed no movement, compared with an increase of 0.7% the previous month.
Factory gate prices (output prices) for goods produced by UK manufacturers rose 2.3 per cent in the year to November 2016, compared with an increase of 2.1 per cent in the year to October 2016.
Core factory gate prices, which exclude the more volatile food, beverage, tobacco and petroleum products, rose 2.2 per cent in the year to November 2016, the largest increase since February 2012.
Paul Faulkner (pictured), chief executive of trhe GBCC, said: “As expected, inflation rose in the month of November, reaching a two year high and reversing the slight decrease we saw last month. Once again, we are continuing to see an increase in costs for manufacturers across the country.
“Despite seeing a brief rally in November, the falling value of the pound continues to have a detrimental impact on costs for businesses and reflects the understandable air of caution which underpinned the Autumn Statement.
“With the exception of air and sea fares, it seems price pressures are starting to filter down to consumers, a development no doubt heightened by the uncertainty caused by the EU referendum result.
“We have just completed surveying for our latest Quarterly Economic Survey and early analysis highlights the concerns a number of our businesses have around exchange rates heading into the New Year.
“We will be launching our Quarterly Business Report in January which will provide an up to date snapshot on the performance of the Greater Birmingham business community and it will allow firms in our region to network and share information on trends impacting the local economy.”
The final Quarterly Business Report of 2016 will be launched at a free breakfast at Birmingham City University on January 19 (7.30-9.30am).