Uptick in inflation underlines need for clear plan to boost business - Chamber

A rise in UK inflation for the first time this year further underlines the Chancellor’s need to set out a plan to help businesses, business leader said today.

The inflation rate rose by 2.2 per cent in the year to July, up from 2 per cent in June, according to official figures.

However, an increase was widely predicted and is largely due to prices of gas and electricity falling by less than they did a year before.

Inflation, which measures the rate at which prices rise, surged to 11.1 per cent in the wake of the Ukraine war and pandemic-related supply chain crunches, driving up the cost of living for millions.

But it had been steadily falling until June, as the Bank of England increased interest rates to a 15-year high to dampen consumer demand.

Raj Kandola (pictured), director of external affairs at Greater Birmingham Chambers of Commerce, said: “Although widely anticipated, the rise in inflation for the first time this year is still a noteworthy development as the impact of lower energy prices starts to fade.

“Policymakers at the Bank of England have urged caution around cutting interest rates given the wider geopolitical uncertainty.

“However, yesterday's wage growth data is likely to have given the MPC more confidence to cut rates before the end of the year.

“Nevertheless, the Government will have viewed this morning's results with caution and further underlines the need for the Chancellor to set out a clear fiscal plan on how she will cut the severe cost pressures businesses continue to face on a daily basis - the upcoming Budget offers the ideal platform to set out a clear and consistent plan.”