Rise in inflation poses questions for growth prospects – Chamber

A rise in UK inflation poses further questions for the Government’s prospects of unlocking growth, businesses leaders said today.

Figures from the Office for National Statistics revealed inflation rose to an eight-month high of 2.6 per cent in November.

It was up from 2.3 per cent the previous month, according to figures from the Office for National Statistics, and in line with economists’ forecasts.

Transport was a key contributor to the increase in consumer price inflation (CPI), with the price of a litre of petrol up by 0.8p a litre to 134.8p.

The latest increase dampens the prospect of the Bank of England cutting interest rates this week.

Raj Kandola (pictured), director of external affairs at Greater Birmingham Chambers of Commerce, said: "Although widely anticipated, this morning's inflation results are likely to pose more questions for the Government on the prospects of unlocking growth as we look ahead to 2025.

"With core inflation remaining resolute, the prospect of the Bank of England cutting interest rates tomorrow has significantly diminished.

"Early analysis from our latest Quarterly Business Report reveals that cost pressures remain prominent for the majority of businesses across the country.

“The measures announced in the recent Budget are only likely to add to those pressures so it is vital the Government uses the coming months to tackle labour market shortages, reduce energy prices and encourage business investment.”