Commenting on the latest figures from the Office for National Statistics (ONS) showing Consumer Price Index inflation rose by 8.7% in the year to April 2023, down from 10.1% in March, East Midlands Chamber chief executive Scott Knowles said: “After several false starts, the peak in inflation looks to have passed, largely due to falls in energy costs that have been a constant strain on businesses across all sectors.
“This will provide a small element relief to East Midlands firms, which cited inflation as by far and away the number one concern in our first Quarterly Economic Survey of 2023, ahead of other issues such as access to skilled labour, corporate taxation and interest rates.
“The huge patience of businesses is also demonstrated by a significant slowdown in the Producer Price Index, which represents the input costs by companies. In February, this was 12.8%, reflecting how firms were absorbing much of these cost pressures rather than passing them on, but this has now dropped to 3.9% in the latest figures.
“But while we are heading in the right direction, it’s a ‘small hurrah’. This does not mean the problems caused by inflation will suddenly go away, with prices continuing to rise from an already high base – it just means that prices are rising less quickly.
“The past year and a half has had a devastating impact on many small firms, which were just beginning to see activity bounce back following the removal of Covid-19 restrictions.
“With the interest rate at 4.5%, widespread skills shortages affecting capacity, and trade frictions still hampering imports and exports, the cost of doing business is the highest in decades.
“Therefore, it’s crucial Government helps businesses by focusing on what we call the ‘four Is’ in our East Midlands Business Manifesto for Growth, A Centre of Trading Excellence – investment, innovation, infrastructure and international trade.
“This will help us to achieve what has eluded us for too long and begin a period of meaningful, long-term economic growth.”