The UK’s inflation rate stayed at 8.7% in May – the same as the April rate and puts and end to the downward trend in UK inflation figures, which had been falling after a peak of 11.1% last year.
The Office for National Statistics said rising prices for “air travel, recreational and cultural goods” helped keep inflation high, while falling prices for motor fuel were the largest “downward contribution”.
David Bharier, Head of Research at the BCC, said: “Today’s CPI rate of 8.7% shows that inflation is remaining elevated for longer than expected. After 18 months of price shocks, the impact of sustained inflation remains the top issue for the vast majority of firms we speak to. What started as a commodity price shock has now created a wage-price spiral.
“However, much more positively, the producer input price (PPI) rate has slowed significantly once again to 0.5%. With our research showing that gradually fewer firms expect their own prices to rise, energy and commodity costs may fall away as drivers of consumer inflation.
“With the interest rate currently at 4.5% and expected to rise further to tackle inflation, widespread skills shortages and trade frictions on the rise, the cost of doing business is the highest in years.
“Action by the Government to help with the squeeze on the labour supply, reform of business rates and support on exports would go some way to helping them face the future with more confidence.”