By Daniel Hunter
Reacting to today's (Tuesday's) inflation figures, the British Retail Consortium (BRC) said that the slowdown will help ease the squeeze on household budgets but still leaves overall costs rising faster than wages.
The Office for National Statistics' official figures show a sharp fall in the Consumer Price Index, down to 3.6 per cent in January from 4.2 per cent in December. The BRC also pointed out that this makes the 5.6 per cent Business Rates rise, planned for April, even harder to justify.
"On its own this isn't going to produce the substantial revival in consumer confidence which retailers and the economy desperately need. But the fall is good news for hard-pressed families who've faced uncomfortably high levels of inflation over the past couple of years," British Retail Consortium Director General Stephen Robertson said.
"Last year's VAT increase has now fallen out of annual comparisons. That's a major reason for the drop but retailers' discounts and promotions and falls in a number of world commodity prices are also helping. The official rate is now at its lowest for over a year and moving in the right direction.
"This fall is even clearer evidence of the injustice of basing April's Business Rates rises in England and Scotland on last September's 5.6 per cent Retail Price Index which was a 20 year high. With the Bank of England predicting inflation to fall further, both Governments should sharply reduce that figure to avoid the damage that will be done to jobs and investment."
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