Inflation resumes downward trend

INFLATION has resumed its downward trend after a brief blip in April.

Latest figures from the Office for National Statistics shows the Consumer Prices Index (CPI) fell to 1.5% in the year to May 2014, down from 1.8% in April.

Falls in transport services costs, notably air fares, provided the largest contribution to the rate decrease. Other large downward effects came from the food & non-alcoholic drinks and clothing sectors.

The largest offsetting upward effects came from increases in the cost of motor fuels and recreation & culture.

The ONS said the timing of Easter in April was likely to have had an impact on movements in the index, most notably for air and sea fares.

Reacting, Tim Pile, President of Birmingham Chamber of Commerce, said: “The continued drop in the rate of inflation is positive news for businesses in Greater Birmingham. Maintaining a healthy business environment through stable inflation rates is essential to attracting investment. 

“Greater Birmingham is seeing record levels of foreign direct investment, creating 6,000 new jobs in the digital and advanced manufacturing sectors. We’re also seeing incredible growth in exports, and a lower inflation rate helps to boost overseas sales by stabilising input costs.

“This month also saw a fall in transport service costs particularly airfares which is positive news for businesses flying from Birmingham Airport.”