Chamber News: Inflation Eases

Dr Brian Sloan, Chief Economist at Greater Manchester Chamber of Commerce

Responding to the inflation figures published by the Office of National Statistics showing that the Retail Prices Index fell from 3.2% to 2.9% in August and the Consumer Price Index fell 0.1% from 2.6% to 2.5%, Dr Brian Sloan, Chief Economist at Greater Manchester Chamber of Commerce, said: “Whilst an easing of inflation will be welcomed by consumers, they continue to be squeezed and the rate of inflation is not falling as quickly as many commentators and the Bank of England had expected.

“The fall today is very much in line with our expectations and, apart from gas, probably reflects some discounting. However, we must be mindful that fuel and food inflation are in the pipeline and will prevent further substantial falls in inflation, and in addition to this there have been some sharp rises in commodity prices recently that are pushing up producer input prices.

"The Bank of England must change its strategy of quantitative easing and the Chancellor’s Autumn Statement must again extend his deficit reduction target to allow for a reallocation of spending on capital projects.”