Inflation eases but firms still feeling the squeeze - Chamber

The rate of inflation eased to 10.5 per cent as price rises slowed for a second consecutive month, new figures reveal today.

The Office for National Statistics (ONS) said the reduced cost of motor fuels led to the decline in the core consumer prices index (CPI) measure of inflation along with cheaper clothing and footwear, and recreation and culture.

Higher prices in restaurants and hotels, food and non-alcoholic beverages pushed inflation up, according to the ONS.

While households and businesses are still feeling the pinch, some economists are predicting that the UK might now have seen the worst of inflation.

The number is down from a 41-year high of 11.1 per cent recorded in October.

Raj Kandola (pictured), head of policy and strategic relationships at Greater Birmingham Chambers of Commerce, said: “As predicted by a number of city analysts, the rate of inflation dipped ever so slightly in December, predominantly driven by a fall in petrol and diesel prices.

“However, we should be clear that prices are rising less quickly as opposed to falling and as analysis from our latest Quarterly Business Report revealed, local businesses are still facing huge cost pressures as they battle with soaring energy costs, supply chain disruption and ongoing labour market challenges.

“With many businesses feeling underwhelmed by the Government 's package for energy support beyond April, all eyes will now turn to the Spring Budget as the pressure ramps up on the Chancellor to deliver a plan that reduces the huge overheads firms are facing and gives them the platform to grow for the year ahead. ”

The GBCC 's Q4 Quarterly Business Report launch event is taking place at Birmingham City University on 7 February.

The theme of the event will focus on Growth in Greater Birmingham - book your place.