Business leaders in the West Midlands welcomed today’s announcement that consumer inflation had unexpectedly dropped to 2.8 per cent in May. The Office for National Statistics also revealed that the retail price index dropped to 3.1 per cent. The figures were largely due to a fall in food and fuel prices but Birmingham Chamber of Commerce warned that restoring inflation to the Bank of England’s target of 2 per cent was proving more difficult than anticipated. President Michael Ward said: “While inflation has fallen back significantly since last September’s high of 5.2 per cent, it is likely to remain above 2 per cent for the next 12 months. “Today’s announcement of a drop is largely credited to fuel and food prices coming down so it is vital that the Bank of England recognises the importance of low interest rates in allowing businesses to remain competitive through this period of high inflation. “We urge the Monetary Policy Committee to keep interest rates at their current levels for the foreseeable future.”
