Business leaders have called on the Bank of England to continue its policy on interest rates despite inflation remaining well above the target.
The Consumer Prices Index (CPI) held at 3.1 per cent in August, the Office for National Statistics (ONS) said, still well above the Bank’s two per cent target.
The largest upward pressure on inflation came from air transport, where fares rose by 16.1 per cent between July and August - a record for that period, the ONS said.
Alan Durham, director of policy at the Coventry and Warwickshire Chamber of Commerce, said the latest inflation figures must not alter policy on interest rates.
He said: “These are very testing times for the Bank of England’s Monetary Policy Committee. In ordinary circumstances, sustained inflation over three per cent would have been met with interest rate rises.
“But these are not ordinary circumstances – in fact, quite extraordinary. We have rates at their lowest rate and £200 billion of quantitative easing in the system.
“They are in place to try to ensure that the UK economy does not slip back into recession and need to be maintained.
“The strong feeling is that inflation will begin to fall back in the next 12 months and that the MPC is better placed at using interest rates to maintain momentum in the economy rather than trying to peg back inflation.”