Dawgen Global: Business leaders concerned at fresh squeeze on consumers - Business News - Business

Tuesday, November 13, 2012

Business leaders concerned at fresh squeeze on consumers - Business News - Business - WalesOnline

Business leaders concerned at fresh squeeze on consumers - Business News - Business - WalesOnline:

BUSINESS leaders today voiced concern over a renewed squeeze on consumers, after a sharper than expected rise in inflation.

Figures released by the Office for National Statistics showed that Consumer Price Index (CPI) inflation hit 2.7% in October, up 0.5% on the previous month.

It marked the reversal of a downward trend and the joint highest September-October rise since 1996.

The rise was largely triggered by a big increase in tuition fees for students. The ONS said education costs jumped by 19.1% last month – the largest increase since records began.

Rising food prices also contributed to the increase.

With utility price rises yet to feed into the figures, there is now concern that the Bank of England will be unable to hit its 2% inflation target. Some economists have warned that interest rates may have to rise if inflation is not brought under control in the coming months.

Janet Jones, Welsh Policy Unit chairwoman of the Federation of Small Businesses voiced concern that the additional squeeze on consumers could hit trading for many businesses in the vital pre-Christmas period.

"The higher than expected inflation figures are disappointing given that the trend has been downwards for the past year," she said.

"The figures come at a time when many businesses and consumers are already being squeezed by rising energy and fuel costs. We hope this doesn’t act as a break on consumer spending, particularly in the run up to Christmas, when many businesses will be looking to capitalise on seasonal sales