The best business advice, opinion, news and expertise in Greater Manchester and further afield.

Tuesday, 15 June 2010

Inflation Falls

Brian Sloan, Head of Business and Economic Policy at Greater Manchester Chamber

Today’s inflation figures showing falls in each measure will be welcome news to consumers.

The underlying reasons for the falls are lower prices at the supermarket and leisure activities, which should lower consumers’ inflation expectations, in turn easing pressure on pay negotiations.

This means the Bank of England will be able to maintain lower interest rates for longer. Businesses will be relieved that there is good news for consumers and interest rates are unlikely to rise in the short term, but the detail of these figures highlights evidence of continuing pressures on business costs. The price of fuel has increased over the last twelve months leading to an impact on transport costs.

This is largely as a result of the depreciation of sterling over the past year, increasing the effective price of oil and other related commodities.

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