Birmingham business leaders have welcomed to a fall in inflation to 2.4 per cent.
Falling prices at the petrol pumps led to a bigger-than-expected drop of 0.4 per cent in the consumer price index in April, the first easing in the annual rate of price rises for six months.
The Office for National Statistics (ONS) said CPI inflation dipped from 2.8 per cent in March, as lower fuel costs and air fares pushed overall transport prices down for the first time in almost four years.
But the temporary dip in inflation triggered by weaker commodity prices will do little to ease the financial pain on households, with inflation expected to spike above three per cent in the summer.
The president of Birmingham Chamber of Commerce said businesses will see this as a confidence boost, but added caution is needed to ensure that the fall isn’t temporary.
“Businesses will greet today’s prediction with cautious optimism,” Steve Brittan said.
“Relatively high inflation is not good for the UK economy at a time when the government is implementing tough fiscal policies.
“Businesses require a stable inflation rate to restore confidence and boost real incomes.
“The next few months will be critical here and we are edging towards the two per cent target set by the Monetary Policy Committee.
“If the fall in inflation continues over the summer, this will be viewed as a positive move.
“All efforts by the government and the Bank must be to stabilise inflation and give businesses a much-needed boost.”
