IoD press release Business relief as January inflation remains at 4%
Commenting on today’s data from the Office of National Statistics, that showed the annual rate of CPI inflation remained at 4.0% in January 2024, the same as in December 2023, Dr. Roger Barker, Director of Policy at the IoD, said:
“Most market commentators were expecting a blip upwards in inflation in January, driven by an increase in Ofgem’s energy price cap. However, it is reassuring that this upward pressure on prices was compensated for by lower price increases elsewhere. As a result, the narrative of a trend towards lower inflation over the next few months remains intact.
“The components of inflation that are under particular scrutiny from the Bank of England, such as services inflation and core inflation (excluding food and energy prices), remain a concern. Services prices are still rising at 6.1% (a slight increase on the previous month) and core inflation is unchanged. However, January did see a moderate easing in food inflation and in sectors like furniture and household goods.
“The decision as to whether to cut interest rates is now finely balanced. It seems likely that headline inflation will fall significantly in the coming months. But conclusive evidence that the battle against inflation has been won remains elusive. On balance, our view is that the Bank of England should act to buttress business confidence and economic growth by cutting rates sooner rather than later.”
