Small firms told inflation will ease in 2012

Date: 19th October 2011

Small businesses will have to wait until next year before inflation starts to ease.

That is according to the Confederation of British Industry (CBI), which said that the recently-reported rise in inflation was to be expected.

It comes after official figures showed that the Consumer Price Index, which is the government's preferred measure of inflation, increased to 5.2 per cent last month.

The CBI said that rising utility bills and other costs contributed to the rise, but claimed next year will see the inflation rate start to fall.

Ian McCafferty, the organisation's chief economic adviser, said: "The sharp rise in consumer price inflation to above five per cent was to be expected given rising utility bills. This will put household budgets under further pressure.

"We hope that this high rate of inflation will be short-lived. We expect inflation to ease back significantly through 2012 as the upward pressure exerted by this year's VAT rise and commodity price increases fades away."

Posted by Emily Smith