Chamber cautiously welcomes inflation drop

The UK inflation rate dropped to 3 per cent in January, a shift cautiously welcomed by business leaders in Greater Birmingham.

Latest data announced by the Office for National Statistics (ONS) shows a fall from 3.4 per cent last month. Key drivers behind this were falling costs in the prices of items including meat, motor fuels, and airfares.

The easing of inflation also boosts business hopes for an interest rate cut by the Bank of England in the coming months.

Paige Bowyer (pictured), GBCC policy and research analyst, said: "A further easing of inflation, to 3 per cent in January, will be cautiously welcomed by businesses and is likely to reinforce expectations of an interest rate cut by the Bank of England in the coming months.

“However, the headline figure only tells part of the story. Many firms continue to face ongoing cost pressures, which are weighing on confidence and continuing to constrain investment and recruitment.

“Next month’s Spring Statement will provide an important update on the economic outlook, and businesses will be looking for signs that easing inflation will be accompanied by steps to reduce the cost of doing business and support growth."

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