New Inflation Figures Highlight Squeeze
on Margins
Commenting on the CPI figures for March,
released today, David Kern, Economic Adviser to the British
Chambers of Commerce, said:
"Today's figures show annual CPI
inflation at 2.5 per cent, the same as in February, and
marginally below the 2.6 per cent figure expected by the
market. Annual RPI inflation fell from 4.1 per cent in
February to 3.8 per cent in March.
"The fall in RPI inflation and the
relative stability in CPI are in sharp contrast with the
figures published yesterday, which show record increases
in producer prices and in raw material costs. Many businesses
are clearly experiencing a serious squeeze on their margins
and the position will get worse once a decline in house
prices effects consumer spending.
"Although CPI inflation is set to
increase in the near term there is a clear danger that
sharply falling growth will push down UK inflation below
target towards the end of the year and in 2009. The MPC
must be more proactive and we urge it to cut rates to 4.75
per cent in May."
15 April 2008.
