Responding to the latest Bank of England decision on interest
rates, and the Quarterly Monetary Policy
Report, Helen Dickinson, Chief Executive at the British
Retail Consortium, said:
“Borrowers must wait at least another month to see if mortgage
costs come down, adding to the squeeze on consumers, who also
face high food prices and rising unemployment. The MPC was clear
that inflation, particularly in food, remains above target as a
result of elevated ‘wage and price pressures'. This is of no
surprise to retailers who have had to absorb billions in extra
costs following the increase in employer National Insurance
Contributions, higher wage bills, and a new packaging tax.
“While the Bank may expect inflation to ease in the coming
months, this could be impacted by new government policies. The
big one on the horizon is the Employment Rights Act. Several
proposals within the new Act – such as on guaranteed hours -
could create a substantial cost and administrative burden for
retailers, while limiting job flexibility and employment
opportunities. By working with retailers to design policies which
work in the real world, Government can get the implementation
right and raise standards without harming entry-level and
flexible jobs, or pushing inflation back up.”
-ENDS-
Specific details from the MPC report:
Overall:
“CPI inflation was 3.4% in
December. Wage and price pressures have continued to moderate but
remain above rates consistent with meeting the inflation target
in the medium term.” (page 5)
On food inflation
“Food, beverage and tobacco inflation is estimated to be
contributing a further 0.5 percentage points to the inflation
overshoot. Elevated labour cost growth is also pushing up
inflation, particularly for services which tend to be labour
intensive.” (page 8)
On unemployment:
“Underlying employment growth has been around zero over the
past year. That is weaker than subdued GDP growth would have
implied, due to cost pressures from higher employer NICs and the
NLW.” (page 22)
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