Business leaders in the West Midlands have urged the Government and the Bank of England to bring inflation under control following the jump to 2.7 per cent.
Birmingham Chamber of Commerce Group said the slight rise should be seen in the broader context after inflation fell to 2.2 per cent, a 34-month low, in September.
Steve Brittan, president of Birmingham Chamber, said: “Today’s rise was to be expected as it will have taken into account energy price rises ahead of winter. Also this month’s CPI inflation could have been impacted by the rise in tuition fees and poor harvests across Europe have nudged food prices up. The Chamber expects inflation to continue towards the Bank of England’s two per cent target, bar the occasional rise. Inflation is the compounded effect of many factors, pressures and shocks within the economy and so cannot always be relied on to do as we would like.
“However in September 2011 inflation was 5.2 per cent so today’s slight rise must be seen in the broader context. High inflation isn’t good for our businesses or the economy and so the Bank of England and Government must do all that they can to control the impact but we must also recognise that events across the globe can have huge impacts on our rate of inflation.”
Meanwhile, Alan Higgins, Chief Investment Officer UK at Coutts, said: “Despite September’s spike in UK inflation, we see it staying in a range of two to three per cent for a couple of years or more.
“Such modest inflation may seem benign, but it is a significant risk for investors who sit back and do nothing.
“Even at relatively low levels, it will slowly erode their wealth.
“To be sure, central bankers across the developed world have abandoned the prudence of their pre-crisis predecessors, and are pursuing inflationary policies with vigour as they seek to stimulate anaemic economies.
“Still, we believe below-par growth and consumer and Government deleveraging will keep a lid on inflation for at least another couple of years.”