Commenting on the inflation figures for December 2016 released today by the Office for National Statistics, Suren Thiru, Head of Economics at the British Chambers of Commerce (BCC), said:
“As expected, inflation rose for the second successive month, confirming that price growth is firmly on an upward trend. December’s rise mostly reflects increases in food prices and air fares in the month.
“Our own survey data confirms that businesses are under increasing pressure to raise prices as a result of the escalating cost of raw materials and other overheads. This is likely to maintain the upward pressure on consumer prices throughout 2017. Consequently, we expect inflation to surpass the Bank of England’s 2% target in the coming months, reaching around 2.5% by the end of the year.
“A period of materially higher inflation is a significant concern for many businesses as it erodes profit margins and stifles their ability to invest and grow, particularly during this time of heightened uncertainty. It is therefore vital that more is done to address the escalating burden of up-front taxes and costs associated with doing business in the UK, including more fundamental action on business rates.”