Inflation figures highlight worsening economic outlook

Commenting on the CPI inflation figures published today by the ONS, David Kern, Economic Adviser to the British Chambers of Commerce, said:

"Against the background of a worsening economic outlook and based on today's rising inflation figures, we appreciate that it is not possible for the MPC to contemplate immediate interest rate cuts and we are no longer calling for such a move.

"Yet we remain convinced that calls for higher interest rates are totally misguided and should be rejected at this stage. All the evidence suggests that increasing inflation is due to short term and temporary factors. Given the expected weakening in economic growth, it is very likely that inflation will fall sharply towards the end of the year and in 2009, probably undershooting the target next year.

"We accept that the MPC is concerned about inflation but such fears should not be exaggerated given the acute threats to growth. We urge the MPC to persevere with a cautious approach and keep rates unchanged  next time around."

Ends

Media Contacts:

Fiona Cunningham
Tel: 020 7654 5812
Email: f.cunningham@britishchambers.org.uk

OR

Sam Turvey
Tel: 020 7654 5813
Email: s.turvey@britishchambers.org.uk

Notes to Editors:

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 business across the UK, which employ over five million people.