Pictured: Micahel Ward

West Midlands business leaders expressed relief at yesterday's announcement by the Office for National Statistics that inflation figures have dropped from November's 4.8 per cent to 4.2 per cent.

Michael Ward, president of Birmingham Chamber of Commerce Group (BCCG), said many of the factors which drive inflation upwards are largely out of the control of the Bank of England. But he said: "We would urge the Monetary Policy Committee to increase the current quantitative easing (QE) programme from £275 to £325 billion.

"We believe this would help create a much-needed boost for the economy in this period of flat growth and demand.

"The fall in inflation has been helped by heavy discounting from retailers over the Christmas period and recent cuts in energy tariffs by the big utilities.

"We do expect to see a continuing fall in inflation over the next few months as the many unique global shocks of 2011 is unlikely to be repeated and will therefore fall out of the calculations.

"It is vital that the Bank of England continues to support business by holding interest rates at 0.5 per cent and considers increasing the QE programme. 

"Inflation is still 2.2 per cent above the Bank of England's target and the Chamber's latest quarterly economic survey for the West Midlands revealed that 23 per cent of manufacturers and 24 per cent of businesses in the service sector cite inflation as the biggest issue putting pressure on their business."