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Phil Smith of Business West

Inflation low will ease pressure on businesses and consumers – Business West

Business leadership organisation Business West has welcomed the latest inflation figures, which shows Consumer Price Inflation falling to the Bank of England’s two percent target for the first time since 2009.

Figures releases by the Office for National Statistics show inflation in December running at two percent, down from 2.1 percent in November.

The largest contributions to the fall in inflation came from food and non-alcoholic drinks, partly offset by an upward contribution from motor fuels

Goods price inflation in December was 1.7 percent, while services inflation was 2.4 percent.

Commenting on the figures, Phil Smith, managing director at Business West said: “It is good news to see inflation fall to its two percent target for the first time since 2009, and should ease the pressure on businesses and consumers.

“With inflation likely to remain at these levels during most of 2014, the unjustified demand in some quarters for interest rate increases should relent.

“In the meantime, the MPC needs to maintain its two-pronged approach with forward guidance on interest rates, and a continued commitment to keeping inflation at its two percent target.”