Chamber says that although inflation has fallen, price pressures remain

Pressure on businesses to raise prices is likely to persist despite inflation having eased to 2.6% in March, says East Midlands Chamber.

The latest estimated figure from the Office for National Statistics is a greater drop than economists anticipated but still above the Bank of England’s target of 2%. 

East Midlands Chamber Director of Policy and Insight Richard Blackmore said: “An easing of inflation will bring comfort to businesses looking to borrow more affordably at a time when investment is so challenging with the higher costs firms are faced with right now.

“However, as we all know, increased employer National Insurance contributions and a higher National Living Wage kicked in this month, making staff costs suddenly more expensive and finding that extra funding could push up prices, while inflation could still rise again in the coming months.

“Not only was inflation the second highest concern of East Midlands firms in our most recent Quarterly Economic Survey, but half of all businesses in the region said they expect to have to increase their prices, with labour costs cited as the main driver.

“Inflation may have eased but is still much higher than the Bank of England’s 2% target.   Amid such difficult conditions for businesses, political leaders need to be doing all they can to support them, while the government’s long trailed comprehensive spending review later this year must be able to raise the confidence of firms at this tough time.”