Chamber News 17th May 2017
Today’s news that inflation has jumped to 2.7% has confirmed long-held expectations and highlighted growing concerns over the capacity for businesses to contain rising costs and the potential threat to consumer demand, as disposable incomes become squeezed. Liz Cameron, Chief Executive of Scottish Chambers of Commerce, said:
“Whilst part of the reason for this latest increase in inflation might be due to the timing of Easter and the consequent impact on the cost of flying, the fact remains that there are continued upward pressures on prices from a range of sources and the Bank of England last week said that it expected inflation to continue upwards to almost 3% later in the year.
“The impact on Scottish business and the Scottish economy is two-fold. Rising prices impact on businesses’ costs and their ability to invest and create jobs, whilst weakening real incomes could depress consumer spending, which has been the strongest driver of economic growth in Scotland over the past few years.
“These challenges, coupled with ongoing political uncertainty represent a risk for the Scottish economy, which our politicians must respond to. With a General Election campaign in full swing, politicians of all parties must remember that it is Scotland’s businesses that are the creators of jobs, wealth and growth in our economy, and businesses will be examining the various Parties’ plans to address this situation with keen interest.”