Peak in CPI inflation clears the way for rate cuts
14/10/08 | 10:10
Commenting on September CPI figures published today by the Office for National Statistics, David Kern, Economic Adviser to the British Chambers of Commerce (BCC), said:
“Today's 5.2 per cent annual CPI inflation is higher than expected, mainly due to rises in gas and electricity bills. While the figures are worrying, it seems very probable that today’s CPI figures signal the peak in the recent upsurge driven by food and energy costs.
“With oil prices well below recent peaks, and economic activity weakening, CPI inflation is set to slow sharply over the next year, probably falling below the 2 per cent target. The threat of recession remains higher in the short term than the risks of higher inflation.
“The MPC must continue cutting interest rates in order to consolidate the positive impact of the bank recapitalisation programme and last week’s internationally co-ordinated interest rate cut. We urge the MPC to cut rates to 4.25 per cent in November, and to bring rates down rates to at least 4 per cent in the following months."
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.