Inflation at 2.9% 'a good thing' – Chamber president
ANNUAL inflation of almost 3% is a sign of growing economic activity and should be viewed positively, according to the Chamber of Commerce president.
Martyn Dorey felt that inflation, which reached 2.9% locally at the end of March, had risen principally because of Brexit and the higher cost of importing goods such as fuel.
However, he said the latest figure also indicated greater economic activity and would erode debt.
'Our inflation figures should actually be viewed as a good thing as they are back to normal levels,' he said.
'A 2.9% rise in inflation is what you would expect to see if a) we are returning to signs of growing activity in the economy, and b), that the days of zero inflation are behind us.'
Deflation would be much more worrying, he said, because it 'leads to stagnant economies'.
Mr Dorey said that if median earnings did not rise at the rate of inflation, it would present challenges to employers.
However, he believed these could be overcome.
'The issue is that sterling is down in value and there is still lots of pressure on wages, which forces more competitiveness out of the sterling-based countries,' he said.
'We have to sharpen our pencils, but it also basically means that businesses are getting much better value as people are working harder and giving more bangs for the same buck.'
