Reassuring falls in petrol prices offset by continuing concern around food and hospitality

Commenting on today’s data from the Office of National Statistics, that showed the annual rate of CPI inflation falling from 10.7% in November to 10.5% in December, Kitty Ussher, Chief Economist at the Institute of Directors, said:

“It is reassuring that the headline rate of inflation continues to fall, driven by an easing of petrol prices in the last few months. However, there are still considerable inflationary pressures in the economy: annual food prices are rising at an ever-increasing rate, up from 16.4% to 16.8% in December. The rate of price increases in the restaurants and hotels sector also continues to climb, up from 10.2% to 11.3% in the month.

“Institute of Directors surveys show business leaders remain very concerned about the high rate of inflation. Given the persistence of domestic price pressures it would therefore be appropriate for the Bank of England to continue raising rates until these are brought under control.”