Credit, Collections & Insolvency News
UK inflation fell to 3.9% from 4.6% in October, the decline is abigger dip than expected, and inflation is now the lowest it’s been in more than two years according to the Office for National Statistics (ONS) data.
ONS Chief Economist Grant Fitzner said “Inflation eased again to its lowest annual rate for over two years, but prices remain substantially above what they were before the invasion of Ukraine.”
“The biggest driver for this month’s fall was a decrease in fuel prices after an increase at the same time last year. Food prices also pulled down inflation, as they rose much more slowly than this time last year.”
“There was also a price drop for a range of household goods and the cost of second-hand cars.”
“Factory gate prices remain little changed over the past year, while on an annual basis the change in costs that producers pay for raw materials and fuel was negative for the sixth consecutive month.”
Martin McTague, National Chair of the Federation of Small Businesses (FSB), said “The decrease in inflation is a whisper of relief to small firms as we end the year. The reduction marks a significant shift from the staggering 10 per cent figure this time last year at the peak of the cost-of-doing-business crisis.”
“As inflationary pressures ease, small firms will be wanting the Bank of England to indicate when interest rates may start to fall – this would increase access to finance, drive economic growth and provide a fighting chance at avoiding a recession.”
“Businesses will be hoping for a stable environment characterised by more predictable market conditions and lower costs in 2024.”
David Bharier, Head of Research at the British Chambers of Commerce said “Today’s data showing the CPI rate grew at 3.9% in November, a greater slowdown than expected, is welcome confirmation that the headline rate of inflation is continuing to ease. However, prices are still rising from a very high base, following multiple economic shocks and core CPI remains stubborn at 5.1%.”
“Supply chain issues during the pandemic and the energy price shock from last year, continue to work their way through the system. Our most recent forecast expects the CPI rate to be higher than the Bank’s 2% target until the end of 2025.”
“While producer prices continue to fall, with –2.6% growth this month, global conflicts such as the war in Gaza could lead to further supply chain breakdowns and higher fuel prices in the short term.”
“Persistent inflation and high interest rates are likely to remain a barrier to business growth for some time to come. Coupled with trade barriers with the EU and ongoing worker shortages, it’s not clear how large-scale growth will be unlocked. Businesses are desperate for a clear, long-term plan for growth which sets out a vision for infrastructure, skills, and green innovation.”
