Responding to official inflation figures, showing that the Consumer Price Index (CPI) fell to 1.8% in January, Tej Parikh, Senior Economist at the Institute of Directors said:
“Low inflation is a boon for the economy just as it attempts to weather the effects of uncertainty.
“For the past two years, households have been squeezed between high prices and weak wage growth. With inflation now at a two-year low and growing upward momentum in pay packets, consumers are likely to feel less of a pinch on their wallets. This easing in the cost of living should provide some uplift for the high street just as consumer confidence appears to be waning.
“Slowing inflation combined with strong employment and rising wages means there is no reason the economy cannot post strong growth later this year – providing the Brexit fog clears. Indeed, today’s data will do little to change the Bank of England’s interest rate calculations which remain dependent on negotiations with the EU.”