There must be no panic decisions on the back of rising inflation
- now at 3.7 per cent, John Rider, West Midlands chairman of
the Institute of Directors, has warned.
A knee-jerk reaction would, he cautioned, threaten the
"tentative recovery".
And he urged the Government to act on petrol prices.
"Petrol prices are a really worry and something has to be done.
Somehow it has to be got under control."
There was "no logic" to the situation, but if the UK was to stay
competitive in Europe the amount of the tax take in the price of
fuel had to be a consideration.
"At some stage there will have to be an interest rate rise
… but please not yet.
"We continue to argue that a combination of spare capacity,
labour market weakness and anaemic money supply growth will begin
to weaken inflation in the second half of 2011. Let's not forget
that headline inflation reached five per cent in the autumn of
2008, but then fell to just one per cent a year later."