12/07/11

Commenting on the trade figures for May, published today by the ONS. David Kern, Chief Economist at the British Chambers of Commerce (BCC), said:

  • Annual CPI down from 4.5% in May to 4.2% in June
  • Annual RPI down from 5.2% in May to 5.0% in June

“For the first time in many months, the inflation figures have delivered a pleasant surprise. Though it is likely that higher utility prices will push up inflation further, the peak will be lower than previously predicted. We expect to see (CPI) inflation peak at around 4.6%, and then decline steadily during 2012.

“These figures will strengthen the hand of the MPC, particularly those on the committee who take the view that recent price surges reflect temporary factors. The measures put in place by the government to reduce the deficit continue to put pressure on consumers and businesses. Interest rates should not increase until later in the year, or possibly into 2012. If signs of weakness in the economy worsen, consideration should be given to increasing the QE programme beyond its current level of £200bn.”

Ends

Notes to editors:

ONS Inflation figures: http://www.statistics.gov.uk/pdfdir/cpi0711.pdf

The British Chambers of Commerce (BCC) is the national voice of local business.

The BCC sits at the heart of a powerful nationwide network of Accredited Chambers of Commerce, serving over 100,000 businesses across the UK, which employ over five million people. For more information visit: www.britishchambers.org.uk

Media contacts:

Liz Larvin
Tel: 020 7654 5813 / 07825746812
Email: l.larvin@britishchambers.org.uk

Lisa Morrison
Tel: 020 7654 5812 / 07717682221