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Short-term low inflation boosts business - IoD

11 Jul 2015

The IoD welcomed official inflation figures, released this morning, which showed the Consumer Prices Index (CPI) measure of inflation running at 0.0% in June 2015, as a boost to businesses and households across the country.

James Sproule, Chief Economist at the Institute of Directors, said:

“Businesses and households will cheer another month of low inflation, which is delivering an unexpected boost to millions of businesses and consumers. The lower cost of essentials, such as transport, has given companies more money to invest, take on staff, pay down debts, increase wages or reduce prices. At the same time, lower household food and petrol bills are feeding through to higher disposable incomes, increasing consumer confidence and demand.

“Given that job creation remains strong and wages are rising at their fastest pace for a number of years, Britain is in little danger of slipping into a period of entrenched deflation or ‘noflation’. The new living wage, which comes into force over the next few years, could eventually feed through to higher prices and reduce margins for some employers, so businesses should make the most of low inflation while it is here.”

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