Lower producer price inflation will benefit businesses and consumers
Commenting on the producer price figures for January 2012 published today by the ONS, David Kern, Chief Economist at the British Chambers of Commerce (BCC), said:
“The January figures show a further significant slowdown in the pace of producer price inflation. Though the absolute figures are still relatively high, the trend is moving in the right direction and will contribute to the lower consumer price inflation we expect to see throughout 2012. This will ease the squeeze on both businesses and consumers, and will allow for a modest improvement in demand in the economy.
“The figures will reassure the MPC that with inflation set to fall, they were right to announce an increase in quantitative easing. But the welcome economic data we have seen in recent weeks should not lull us into a sense of complacency. Introducing policies to support growth should be a top priority, such as reducing red tape and implementing a credit easing programme to help improve the flow of credit to businesses.