Commenting on the inflation statistics for April 2018, published today by the Office for National Statistics, Suren Thiru, Head of Economics at the British Chambers of Commerce (BCC), said:
“Inflation surprisingly slowed in April with the main downward pressure to the rate coming from air fares, as a result of the timing of Easter, compared to last year. This more than offset upward pressures from rising fuel prices. The latest data is further confirmation that inflation remains on a downward path.
“The increase in producer prices may lead to a short-term uptick in inflation over the coming months, but it is likely to be a temporary rise with the rate continuing its overall trend back towards the Bank of England’s 2% target.
“While we think that interest rates will rise again before the end of the year, we would caution against the sort of sustained tightening in monetary policy recently implied by some MPC members, as it could dampen business and consumer confidence and further subdue UK economic growth. Instead more needs to be done to lift the UK out of its current low growth trajectory, including incentivising long-term business investment.”