Latest inflation figures

Inflation figures released today by the Office for National Statistics, show that the annual Consumer Prices Index increased from 2.7% in January to 2.8% in February, though the Retail Prices Index decreased from 3.3% to 3.2%.

Commenting on the figures, Dr Brian Sloan, Chief Economist at Greater Manchester Chamber of Commerce, said: “Inflation continues to rise as we have been warning for many months. Whilst this remains a concern for households and consumer demand, we must also be clear that this is having considerable impact on businesses and ultimately the public sector finances; causing a negative feedback loop of pressure for the UK economy.

“For businesses inflation has created pressure on costs, especially energy prices that include the Climate Change Levy and business rates that are set using inflation measures. In addition to this, the pressure on Sterling is causing inflation for input prices of imported goods and materials.

"Separate figures released today show that producer input prices have increased by 2.5%, up from 1.9% last month. Businesses are finding it difficult to pass on the increases in costs in full to households that remain squeezed, which puts pressure on business margins and therefore tax revenues from profits. The Bank of England has so far resisted a further round of asset purchases and this would be the wrong thing to do at this time and we welcome the Governor’s comments that Sterling has fallen far enough. This suggests the Bank may move to preserve the current level of Sterling.”