Double-dip recession still possible, says BCI
Birmingham Chamber of Commerce and Industry (BCI) has warned that a double-dip recession cannot be ruled out following the latest inflation figures.
Inflation remains well above the Bank of England’s two per cent target at 3.1 per cent in July, an increase from 3.2 per cent on the previous month.
The Office for National Statistics (ONS) said food prices jumped 0.7 per cent between June and July, the biggest monthly rise for two years.
But falling petrol costs and second-hand car prices over the month - in contrast with steep rises a year earlier - helped ease the consumer price index (CPI) overall.
Will Rogers, BCI policy adviser, said: “The cost of living is being pushed higher by increased energy costs, rising food prices and the return of VAT to 17.5 per cent, from 15 per cent a year ago.
“Unemployment did fall last week but there is no doubt that the economy remains extremely fragile, and it is likely unemployment figures will rise owing to public sector cuts.
“A double dip recession cannot be ruled out as growth is likely to be tempered by the continuing fiscal consolidation and the persistence of tight credit conditions.”
