The ONS has revealed the latest inflation data. Inflation has risen from 3.9% to 4%, which is 2% higher than the government’s target.
Paul Butterworth, CEO at Chambers Wales South East, South West and Mid, said:
“The slight rise in inflation to 4% will be a disappointment to many businesses who had hoped that the rate would continue to ease.
“In our Quarterly Economic Survey for Q4 of 2023, over half (52%) of businesses in Wales stated that they were concerned about inflation. While wage growth continues to outpace price rises and inflation remains higher than the government’s target of 2%, it is unlikely that there will be any cuts to interest rates in the near future.
“High inflation and interest rates, together with trade challenges and the ongoing skills shortage, mean that conditions remain tough for businesses. A clear, long-term plan for economic growth that reduces these pressures and delivers on skills development, green innovation and infrastructure would be welcomed by Welsh businesses.”
David Bharier, Head of Research at the British Chambers of Commerce, said:
“Consumer price inflation remains stubborn with a slightly higher than expected growth rate of 4% in December 2023, and no change in core inflation at 5.1%. However, producer prices continued to fall by 2.8%.
“For consumers, prices continue to rise from a very high base. The current global picture means the path ahead is now more uncertain. One of the core reasons for the last two years of inflation was supply chain collapse due to Covid-19 lockdowns.
“We are already seeing current disruption in the Red Sea leading to a spike in indicators such as shipping container and insurance costs.
“Our surveys show while inflation has been diminishing as a concern for businesses, it remains top of the list, particularly for sectors more exposed to economic shocks like hospitality and retail. Coupled with trade barriers with the EU and ongoing worker shortages, trading conditions remain tough.
“Businesses are increasingly desperate for a clear, long-term strategy which delivers on infrastructure, trade, skills, and green innovation to grow the economy.”