Inflation fall a step in the right direction - Chamber

UK inflation fell to a two-and-a-half year low of 3.4 per cent, slowing from 4 per cent in January.

The Office for National Statistics (ONS) said food and eating out costs drove the fall in the headline rate of inflation.

And Chancellor Jeremy Hunt said the larger-than-expected drop meant inflation was "forecast to hit the 2 per cent target within months".

Greater Birmingham business leaders welcomed the news but warned inflation still remains a concern for a large proportion of businesses.

Cameron Uppal (pictured), policy and public affairs advisor at Greater Birmingham Chambers of Commerce, said: “Local businesses across Greater Birmingham will have woken up to welcome news, as the rate of inflation fell by more than many city analysts expected it to. This notable drop goes a long way to reaching the Government's 2 per cent target.

“It is important to note that whilst this morning's news is very much a positive step in the right direction, many firms feel that we are not out of the woods yet as in our latest Quarterly Business Report, 30 per cent of businesses revealed that inflation was still more of a concern than three months ago.

“With the energy price cap coming down in April, a further fall is expected in the coming months – however, core inflation remains high and that figure is likely to influence the Bank of England’s decision making on monetary policy.

“As a voice of business in the region, advocating for the needs of our members, we are continuing to lobby the Government to minimise supply chain disruption, tackle labour shortages and improve our energy security – asks which feature heavily in our recently released Business Commission West Midlands report.”