Fall in inflation should steady Governor’s hand
Published 19 Aug 2014Commenting on the news that CPI inflation fell to 1.6% in July and RPI inflation fell to 2.5%, Liz Cameron, Chief Executive of Scottish Chambers of Commerce, said:
“This latest fall in inflation leaves it well within the Government’s target of 2% and ought to reduce the pressure on the Bank of England for an early increase in interest rates.
“The good news is that our economy is growing, employment levels are high and unemployment is falling but there remain issues over productivity levels and real earnings. Whilst buoyant investment and rapidly increasing property values in London may distort the picture somewhat, the fact remains that for Scotland and the majority of the rest of the UK, the recovery remains fragile and a premature increase in interest rates could do more harm than good.
“The Bank of England is right to remind us that interest rates will need to rise but the timing of this will be crucial to sustaining the recovery as broadly as possible across the country.”