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Low inflation a welcome boost to UK economy - IoD

25 Mar 2015

Commenting on figures released this morning which showed inflation (CPI) running at 0.0% in February 2015, James Sproule, chief economist of the Institute of Directors said:

“We welcome the news that inflation has once again fallen. It is particularly encouraging that this has been driven by falling fuel costs. This is putting extra spending power directly into people’s pockets and is acting as a further catalyst to economic growth.

“Looking to the longer-term, we are encouraged that IoD members are planning pay rises for their staff in 2015. In the majority of cases these will be tied to improved corporate performance. This is the sort of responsible decision which will ensure economic growth is sustainable.

“However, low inflation does mean that governments must be that much more careful with decisions on tax and spending, as very low, or zero, inflation means miscalculations cannot be eroded in future years by inflation. An incoming government must be very aware that they will have to live with any changes to tax rates or thresholds for the long term."


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