Inflation figures jump following rising energy prices, official figures show

Gus Williams, Interim CEO at Chambers Wales South East, South West and Mid, said:

“Many businesses in Wales are undoubtedly delaying investment decisions due to a combination of weak growth and high interest rates, and the recent budget is also causing businesses to reassess their plans. The Bank of England are clearly still concerned there are inflationary pressures in the domestic economy, with global events, particularly stemming from the US, adding to the mix of uncertainty. Today’s inflation figures will have make the Bank of England’s job no easier.

“In the past we might have expected public investment to act as a spur to growth, but fiscal pressures will put a limit on this. Interest rates are not particularly high by historical standards but after getting used to years of very low rates it will take businesses time to readjust. Rising labour costs should act as a spur to investments in productivity, but we may not see this start happening until business confidence returns, which will be unlikely to happen until after we see what Trump’s administration’s policies are.

“Energy investments and construction growth are going to be a big factor in Wales and the hope is that these will stimulate broader economic activity but there are still policy hurdles to overcome. The current circumstances make the work of the Chamber even more important in connecting businesses across Wales to solve challenges and identify opportunities and help shape government policy.”