Poor Inflation Figures Will Complicate The Mpc’s Job
13 May 2008 in Chamber News
Commenting on the CPI figures for April released today, David Kern, Economic Adviser to the British Chambers of Commerce, said: "Coming after yesterday's sharp increases in producer price inflation, today's figure will inevitably increase the reluctance of some MPC members to consider early interest rate cuts."However, there is also growing evidence that the slowdown in UK economic activity is worsening. The pace at which house prices are falling appears to have accelerated. Today's inflation figures, which are mostly due to higher prices for gas, electricity and heating oil will further intensivy the squeeze on personal disposable incomes. The recent figures also point to worsening pressures on business margins. "Without a modest cut in interest rates to 4.75% in June, the risk of a severe economic downturn would intensify. The immediate threats to growth remain more serious than the risks of higher inflation."