Commenting on the news that inflation has rose to 1.6% in December last year, Liz Cameron, Chief Executive of Scottish Chambers of Commerce, said:
“It has long been predicted that inflation would continue to rise and this latest inflation figure comes as no surprise. There is a wide range of upward pressures on inflation at the moment, principally transportation costs, which have risen as the price of oil recovered throughout 2016. However, it now appears that food prices were the only downward pressure on inflation over the year and even these began to increase during the month of December.
“Though inflation still remains below the Government target, there is no doubt that it will exceed this during 2017, with the Bank of England expecting that it could reach 2.7% later in the year. Inflation is a concern for business as it can damage profitability and suppress growth in consumer demand, which has to date, been one of the principal drivers of growth in our economy.
“This underlines the urgency for the UK and Scottish Governments to tackle business costs at the root by reducing the burden of business taxation.”