Business leaders in Birmingham have warned that Britain’s inflation figures are going to get worse before they improve.
Christine Braddock, President of Birmingham Chamber of Commerce, said the news that inflation had increased from 3.1 per cent in September to 3.2 per cent was part of a long term trend which would eventually drive interest rates up.
She said it was the eighth month in a row that inflation had been above three per cent, and added: “The recent decision to hike VAT to 20 per cent next year by the Coalition Government will undoubtedly keep inflation higher.
“The planned VAT rise and the pound’s depreciation mean that inflation still remains way above the two per cent target.
“Interest rates will have to rise at some point, but it is clear that uncertainty remains prevalent so we expect the Bank of England to hold off, for now.”
Ms Braddock said that despite this, the Chamber’s main concern continued to be ensuring economic growth and job creation, rather than a surge in inflation. She added that the Bank of England should continue to focus on the former, rather than reacting to the higher inflation figures.”