Commenting on the May inflation figures published yesterday by the ONS, David Kern, Chief Economist at the British Chambers of Commerce (BCC), said:
“Although the drop in inflation was less than anticipated, these figures indicate that CPI inflation is set to fall further in the coming months, while RPI is likely to move deeper into deflationary territory.
“Whatever the longer-term inflation risks may be, they are unlikely to materialise in the near future and can only be dealt with after the recession ends. “The main priority must remain on easing the severe downturn in economic activity and to contain the relentless increases in unemployment. Economic policy must stay expansionary and it would be dangerous to withdraw the monetary and fiscal stimulus too early.”