IoD: Relief to businesses concerned that inflation might have been accelerating

Commenting on data from the Office of National Statistics that showed annual CPI inflation falling slightly from 3.2% in August to 3.1% in September 2021, Kitty Ussher, Chief Economist at the Institute of Directors, said:

“The annual inflation rate for September 2021 continues to be affected by the pandemic measures undertaken a year earlier, notably the unwinding of the ‘Eat Out to Help Out’ scheme that depressed hospitality prices in August 2020. However, we can also see the very particular pressures in the fuel sector that were experienced last month, with for example a 49% annual rise in the cost of liquid fuels within the overall basket of annual purchases.

“Today’s data will bring some relief to businesses concerned that inflation might have been accelerating; looking forwards the Bank of England will want to make a judgement as to whether the ending of the furlough scheme in September is bringing greater capacity into the economy or whether a monetary tightening is needed to curb future inflation expectations.”