Business leaders have expressed surprise that CPI inflation held
at 1.8% in July.
Katie Teasdale, senior policy adviser at Birmingham Chamber of
Commerce and Industry (BCI) says: "Given the extra capacity across
the economy as well as falling food prices, we expected inflation
to continue to fall this month.
BCI urges the Bank of England to retain the 0.5% interest rate
and to stick with quantitative easing.
Ms Teasdale says: "Clearly the greatest threat associated with
the Bank's preferred policy stimulus of quantitative easing- that
is printing money to promote lending across the economy-is rising
inflation.
The Chamber warns of growing deflationary pressures across the
economy with a greater risk of falling growth.
Ms Teasdale adds: "As CPI inflation remains under target, RPI
inflation is in negative territory and we face growing deflationary
pressures across the economy. Our priority must be to return to a
stable growth, low inflation economy, as soon as possible.
"As ever, stability remains crucial to business success."