Boost for firms as inflation drops to single figures - Chamber
UK inflation fell sharply to hit single figures for the first time since August, new figures reveal today.
And Greater Birmingham business leaders hope the news will provide a boost to consumer spending in the local economy.
According to the Office for National Statistics (ONS), the overall rate of inflation fell to 8.7 per cent in April - down from 10.1 per cent but still above the 8.2 per cent figure widely forecast by analysts.
The ONS said the drop is due to the fact that energy price rises are slowing from the extreme hikes seen a year ago just after Russia invaded Ukraine and was hit with sanctions.
The rate at which grocery prices rose slowed marginally in the year to April, but at 19.1 per cent remains close to historic highs.
Cameron Uppal (pictured), policy and public affairs advisor at Greater Birmingham Chambers of Commerce, said: “It is reassuring to see UK inflation fall to single digit figures for the first time since last August.
“The high rate of inflation has had a destabilizing impact in the past eight months as businesses have struggled to deal with spiralling costs and plan for the long term with any confidence.
“It is an indication of just how damaging inflation was proving to be for business confidence that only last month the Bank of England raised interest rates to 4.5 per cent - the highest rate we 've seen in fourteen years.
“Whilst the CPI figure is still some way off the two per cent figure that the Bank of England are aiming for, this big drop in inflationary pressures should in turn lessen the impact on household bills, which should be positive for consumer spending in the local economy.
“Our latest Quarterly Business Report has only served to highlight the erosive impact that inflationary costs have had on local businesses in recent months, with many businesses having to dig deep into their cash liquidity.
“However, the Government still needs to show its commitment to easing the huge cost pressures firms are facing particularly in light of ingrained labour market challenges and supply chain disruption. ”