Hartlepool business expert says continued fall in inflation will be good for pay rises

Colin Griffiths of Stranton Business Centre.
Colin Griffiths of Stranton Business Centre.

A BUSINESS expert has warmly praised news that inflation has fallen for the sixth month in a row.

Town business consultant Colin Griffiths said it could mean more companies being able to afford pay rises and also mean more security for the long-term future of town businesses.

Inflation fell for the sixth month in succession in March paving the way for an end to the prolonged squeeze on wages.

The Consumer Prices Index (CPI) rate dropped to a new four-year low of 1.6 per cent, from 1.7 per cent in February, according to the Office for National Statistics (ONS).

It comes a day ahead of today’s separate ONS labour market statistics which are expected to show that regular pay is rising at a rate of 1.8 per cent, up from 1.3 per cent.

Mr Griffiths, from the Stranton Business Centre in Hartlepool, said: “People have not had pay rises for a long time and it is now being looked at as important for employees who have suffered for a long time.

“It is very much good news in that respect.”

Chancellor George Osborne said: “These latest inflation numbers are welcome news for families. Lower inflation and rising job numbers show our long term plan is working, and bringing greater economic security.

“But there is still much more we need to do to build the resilient economy I spoke of at the Budget.”

Earnings have not increased at a higher rate than inflation since a brief spike in March and April 2010 and have not consistently been improving since 2008. 

Mr Griffiths said: “With all the problems of the last few years, it is nice to be able to report that the inflation rate is as low as it is.

“It has a knock-on effect for so many other things.”

The latest figures showed pressure on households was partly eased by food and non-alcoholic drink inflation falling to a new four-year low of 1.7 per cent.

But a greater downward pressure on inflation came from fuel pump prices.

Petrol was unchanged from February to March this year compared to a rise of 2.2p per litre at the same period in 2013. Diesel fell by 0.4p compared with a 1.9p rise in 2013.

Clothing and footwear prices increased by a lower rate than last year, with much of the downward effect from women’s fashions.