Inflation sparks price rise fears - Chamber

West Midland business leaders have described the 8.7 per cent inflation rate as 'worrying ' amid fears that firms will have to raise prices further - with interest rates also set to rise.

Cameron Uppal (pictured), policy and public affairs adviser for the Greater Birmingham Chambers of Commerce, said many city analysts had expected a slight fall in inflation.

"The news that the rate of inflation remains at 8.7 per cent is worrying for businesses across the region, especially as many city analysts were expecting a minor fall, ” he said.

“Our recent Quarterly Business Report has only served to highlight the erosive impact that inflationary costs have had on local businesses in recent months as many are faced with the inevitable pressure of raising their prices.

“With both core and service inflation on the up, the prospect of an interest rate rise seems inevitable causing further hardship for firms up and down the country.

“The onus now rests on the Government to restore confidence to the markets and tackle the cost of doing business crisis - minimising trade friction, opening up access to a wider labour force and reforming business rates all need to be prioritised. ”

Core inflation - which excludes food, energy, alcohol and tobacco process - is now at its highest level in the UK for more than 30 years at 7.1 per cent, the highest annual rate increase since March 1992.

Greater Birmingham Chambers of Commerce will be discussing the latest economic trends at our upcoming Q2 Quarterly Business Report launch event.