16 Nov 2022

Record inflation shows a clear economic plan is needed in Autumn Statement, says East Midlands Chamber

Commenting on the Office for National Statistics’ figures showing Consumer Price Index inflation reached 11.1% in October 2022, East Midlands Chamber (Derbyshire, Nottinghamshire, Leicestershire) chief executive Scott Knowles said: “The trajectory of inflation is unsustainable for businesses, whose confidence is falling as they are being hit by cost pressures left, right and centre.

“Ahead of tomorrow’s Autumn Statement, businesses will need to see a clear plan from the Chancellor to boost business investment and growth, as well as targeted measures that ease the specific causes of inflation. The UK economy otherwise faces a lethal combination of recession and runaway inflation.

“Our latest Quarterly Economic Survey showed confidence among East Midlands businesses over profitability and turnover has fallen by 21% and 17% between the second and third quarters of this year, with investment intentions dropping by 6% for both people and plant and machinery.

“With Producer Price Inflation at 19.2% far above the Consumer Price Index of 11.1%, this shows the scale of input price rises that businesses are continuing to absorb. But they can’t do this forever, with a net 58% of our region’s companies expecting they will be forced to raise prices over the coming year as they grapple with the cost-of-doing-business crisis.

“While the Bank of England seeks to control inflation through further interest rate rises, this is a blunt instrument that fails to address the core drivers of inflation for most firms – soaring energy costs, global supply chain disruption and rising staff costs due to labour shortages.”