Ease in inflation offers relief to business, but wider issues remain – Chamber

Business leaders in Greater Birmingham have cautiously welcomed the slowdown in inflation to 2.8 per cent today – but warned concerns around wider economic pressures are still prevalent.

The fall in the inflation rate in April was partly down to the energy price cap kicking in alongside lower water and sewage bills, vehicle tax, holiday packages, and food prices including chocolate and meat.

On a monthly basis, inflation rose by 0.7 per cent in April, the same level as March. Core inflation including energy and food, rose 2.5 per cent, down from 3.1 per cent in March.

Paige Bowyer (pictured), policy and research assistant at Greater Birmingham Chambers of Commerce, said: “A slowdown in inflation to 2.8 per cent in April offers some welcome relief for businesses, but it is unlikely to mark a decisive turning point given the wider pressures still facing the economy.

“While lower air fares and changes to energy costs helped bring the headline figure down, ongoing disruption to global energy markets and rising fuel costs continue to create uncertainty for firms already managing tight margins.

“The Bank of England therefore faces a difficult position in the months ahead. Moving too quickly on interest rates could risk further inflationary pressure, while keeping rates elevated for longer may add to the strain on business confidence, investment and growth.

“Action remains needed to reduce the cost burden facing firms, particularly around energy prices, business rates and wider operating costs, alongside longer-term measures that support trade, investment and productivity.

“Businesses across Greater Birmingham are encouraged to take part in our latest Quarterly Business Report survey to help build a clearer picture of how firms are responding to the current economic challenges.”