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Inflation rise must not deflect government from tackling business costs

Commenting on the increase in Consumer Price Index (CPI) inflation from 0.5% to 0.6% in July 2016, Scottish Chambers of Commerce has said that there remains room for additional government support for businesses, despite the upward pressure on inflation that will result from rising import costs. 

Liz Cameron, Chief Executive of Scottish Chambers of Commerce, said:

“Although inflation has nudged up slightly in the last month, it remains well below the Government target of 2%.  In the wake of the weakened value of the pound in the wake of the EU referendum vote, we would expect some upward pressure on inflation to emerge in the coming months as a result of the rising cost of imported goods.  Nevertheless, it will be crucial for the UK and Scottish Governments to use their powers to stimulate the economy and support businesses.

“Economic growth must be maintained by enabling businesses to invest, and, in order to achieve this, Government must seek to address core business costs.  In the run up to the EU referendum, we found that businesses were scaling back their capital investment plans, and there is a pressing need to turn this around.  With a Business Rates revaluation scheduled for next year, the Scottish Government must use this fiscal lever to reduce one of businesses’ main costs.”