New Inflation Figures Should Not Deter The Mpc From Cutting Rates In February
15 January 2008 in Chamber News
Commenting on the Consumer Price Index figures for December released today David Kern, economic adviser to the British Chambers of Commerce, said: "Today’s figures show that annual CPI inflation was 2.1 per cent in December, the same as in November and October, and broadly as expected. "The inflationary situation is still worrying, and yesterday’s producer price figures highlight strong inflationary figures, mainly in manufacturing. Inflationary pressures remain relatively benign at the consumer level because retailers are being forced to cut their margins in the face of weak demand.
"On balance we believe that the new figures should not deter the MPC from cutting rates in February by 0.25%. It is significant that RPI inflation, which provides the benchmark for many wage negotiations, fell in December to 4% from 4.3% in November.