Inflation jumps higher than expected amid bills increase – Chamber

Business leaders today called on the Government take action after UK inflation jumped by more than expected to 3.5 per cent.

The increase in inflation to its highest rate in more than a year came after dramatic increases in water bills, energy costs and council tax during April.

A rise in employer national insurance contributions and a boost to the national minimum wage also put pressure on companies to raise prices by more than city analysts had forecast.

The Office for National Statistics said the inflation increase was driven by surges in bills for gas, electricity, water and transport.

Raj Kandola (pictured), acting deputy CEO at Greater Birmingham Chambers of Commerce, said: “Although expected, the increase in the rate of inflation went beyond many of the projections made by city analysts over recent weeks.

“April was the month in which the increases in National Insurance, changes to business rate relief and the living wage kicked in - all of which added to the eye watering cost pressures continue to face on a daily basis.

“Eyes will turn to the Bank of England to see if the MPC accelerate the pace of interest rate cuts. However, with inflation expected to remain above its target rate for a number of months, it seems unlikely.

“Businesses will want to see the Government take action in light of these results and it’s good to see the UK taking the lead in cultivating closer ties with the likes of the EU, India and US over the recent weeks.

“However, the Chancellor will need to use the coming months to set out a road map which will reduce business costs, cut red tape and make it easier for firms to invest and grow.”