Commenting on the inflation statistics for December 2021, published by the Office for National Statistics, Head of Economics at the BCC Suren Thiru, said:
“The latest figures confirm that inflation ended 2021 on a significant upward trend.
“December’s increase largely reflected rising food prices and higher clothing and furniture costs, which were slightly offset by a downward contribution from petrol prices.
“Higher inflation is adding to the unprecedented surge in costs facing businesses. The cumulative effect of soaring energy bills, increasing input costs and a looming National insurance hike means that firms are under mounting pressure to continue raising prices.
“Inflation will continue to soar in the coming months as surging energy prices, rising raw material costs and the reversal of the VAT reductions for hospitality push it well above 6% by April.
“Surging inflation means that a February interest rate rise may be inevitable. However, raising rates too aggressively risks undermining confidence and will do little to dampen the global factors driving this current inflationary spike.
“It is crucial that the Government’s Supply Chain Advisory Group and Industry Taskforce provides real world solutions to the supply and labour shortages that continue to drive the upward pressure on consumer prices. More must also be done to ensure there are no additional costs placed on business for the remainder of this Parliament.”
More detail on the latest inflation statistics can be found here.