Inflation fell below double digits for the first time since August this morning (24/05), according to the Office for National Statistics (ONS). Inflation was 8.7% in April, down from 10.1% the previous month. However, despite the improvement, the figure is above the 8.2% forecast by analysts.
The drop in inflation is due to energy prices reducing after the spike on the back of the war in Ukraine. However, food prices remain at 19.1% which is near record highs. Therefore, suggesting the current fall in inflation is encouraging but there remain underlying pressures that are halting the easing of inflation.
The rate of inflation in April is still four times higher than the Bank of England’s target of 2%. It has raised interest rates 12 times since December 2021 to stop rapid price increases, and the current interest rate of 4.5% is the highest in 14 years. The Chamber will be monitoring the actions of the Bank of England as a result of the figures released this morning. Businesses need stability and confidence to ensure they can make informed decisions.
In our most recent Quarterly Economic Survey Report, we received numerous comments from businesses highlighting the significant inflationary pressure they are under and have called for further support from the government. Inflation was by far the most significant concern to businesses in Herefordshire and Worcestershire that answered the survey.
Our latest Quarterly Economic Survey for Q2 is now live, please have your say on issues that are of concern to your business, such as inflation, for us to report back to local and national government on your behalf. Click here to fill in the survey.