Business encouraged by further fall in inflation – Chamber

A sharper than expected fall in inflation to 3.2 per cent in November will provide encouragement for firms in Greater Birmingham, business leaders said today.

The Office for National Statistics (ONS) this morning reported an easing in the pace of the main consumer prices index measure from the 3.6 per cent annual rate seen in October.

The main downwards pressure came from food costs amid a supermarket price war to secure custom ahead of the core Christmas season.

The ONS noted decreases in the prices paid for items such as cakes, biscuits and breakfast cereals.

The fall inflation could pave the way for the Bank of England to cut interest rates.

However, Greater Birmingham Chambers of Commerce warned that businesses are still feeling the pinch due to increasing costs and the implementation of the Employment Rights Bills

Paige Bowyer (pictured), policy and research analyst at Greater Birmingham Chambers of Commerce, said: “Businesses will be encouraged by the larger-than-expected fall in inflation in November to 3.2 per cent, suggesting that it is now past its peak.

“With unemployment on the rise and wage growth down, this may also suggest there is now more room for the Bank of England to cut interest rates tomorrow.

“However, confidence remains fragile. With the Budget still fresh and the Employment Rights Bill passed yesterday, many firms are assessing what the latest legislative changes will mean in practice for their costs and capacity to invest. 

“Businesses remain under enormous cost pressures and need to see meaningful action on planning, regulation, skills and the EU reset in the New Year to unlock meaningful economic growth.”