BCC: Fall in inflation will accelerate next year
13 Dec 2011
- Annual CPI inflation at 4.8% in November, down from 5.0% in October
- Annual RPI inflation at 5.2% in November, down from 5.4% in October
Commenting on the inflation figures for November published today by the ONS, David Kern, Chief Economist at the British Chambers of Commerce (BCC), said:
“The fall in inflation in November was as expected, and will accelerate in the early months of 2012. The latest BCC forecast* predicts inflation will fall from an average of 4.5% in 2011, to 3.3% in 2012 and 2.0% in 2013. For annual average RPI inflation, we predict an average of 5.2% in 2011, 3.5% in 2012 and 2.3% in 2013.
“The fall in inflation strengthens the case for an increase in Quantitative Easing (QE). The latest figure should reassure the Monetary Policy Committee that it is correct to persevere with expansionary measures. While an increase in QE is necessary, it is not on its own sufficient enough to support growth in the economy.
“The government must supplement any additional QE with other measures including the rapid implementation of its credit easing plans. In addition, moves to reduce regulation, and cut business rate increases next year, which are currently pegged to last September’s peak inflation figure of 5.6%, would help businesses grow and create jobs.”
ONS inflation figures: http://www.ons.gov.uk/ons/rel/cpi/consumer-price-indices/november-2011/index.html
*BCC economic forecast (November 2011): http://www.britishchambers.org.uk/zones/policy/press-releases_1/bcc-quarterly-economic-forecast-uncertainty-will-delay-upturn-until-late-2012.html
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