Inflation figures should not spark a knee jerk reaction on interest rates, says BCC

16th July 2014

Annual CPI inflation in June 2014 was 1.

9%, up from 1.5% in May The largest contributions to the rise in inflation came from clothing, food, non-alcoholic drinks and air transport Goods price inflation in June 2014 was 1.4%, while services inflation was 2.5% Commenting on the CPI inflation figures for June 2014, published today by the ONS, David Kern, Chief Economist at the British Chambers of Commerce (BCC) said: -The increase in inflation in June should not spark a knee jerk reaction on interest rates by the Monetary Policy Committee (MPC). Monthly fluctuations in the inflation figures are normal and there are no significant upward pressures, particularly as wage growth remains weak. -The UK recovery is still not secure and growth amongst UK businesses must be fostered prior to any future interest rate rises. To sustain business confidence, the MPC must be more clear and consistent on the future path of interest rates, while the Government must place more emphasis on improving access to finance for growing firms and exporters.