Commenting on producer prices figures for April, released today by the Office for National Statistics (ONS), David Kern, Chief Economist at the British Chambers of Commerce (BCC), said: “The producer prices for April are higher than expected, with raw material prices increasing sharply in particular. With factory gate inflation at 5.3%, the pressures facing businesses will intensify and many will see their cashflows squeezed.
“The Monetary Policy Committee will find these figures uncomfortable, but they do not justify any change in interest rates in the short-term. Over the past two days we have seen a sharp decline in the price of oil, gas and other commodities. This has created hopes that the huge increases in commodity prices seen over the past year could slow, and even reverse.“As the Government continues its programme to reduce the deficit, it should make every effort to ease the regulatory and other burdens facing business, making it easier for them to cope with the current international pressures while driving the UK recovery.”