The Institute of Directors (IOD) has expressed concern over the UK’s inflation rate and called for another interest rate hike to address the issue.
According to the Office of National Statistics, the annual rate of CPI inflation was 10.1% in March 2023, a slight decrease from 10.4% in February, but identical to the rate observed in January.
Kitty Ussher, chief economist at the Institute of Directors, said: “Business remains extremely concerned by the rate of inflation and wants to see it under control.
“While it is a relief that the headline rate of inflation is now pointing downwards again, following the surprise rise last month, the Bank of England’s job is not yet done.”
Ussher pointed out that the improvement in March was primarily due to falling transport prices, which concealed the persistent core inflation rate of 6.2%.
Food inflation, meanwhile, continued to rise, reaching 19.1% in March, up from 18% the previous month.
She added: “Taken together with yesterday’s strong labour market data, it is now clear that there is more demand in the economy than the Bank of England had expected in Q1.
“The headline rate will come down a notch in April as base effects from last year work their way through the data, but to address the underlying issues, the Monetary Policy Committee (MPC) still needs to raise rates again when it meets in a few weeks’ time.”
