ISME welcomes fall in inflation

ISME, the Independent Business Organisation, has cautiously welcomed the slight reduction in inflation from 2.7% last month to 2.6%, but warned that this may be only a temporary respite with significant increases due in energy, health and postal costs.

According to ISME chief executive Mark Fielding, climbing costs in electricity, gas, healthcare, postal costs and local charges will contribute significantly to inflationary pressures over the next number of months.

"It remains to be seen if these increases are offset by reductions in other areas. The level of increases, especially in electricity and gas, suggests that the trend will be upwards over the next number of months, confirming that the scourge of inflation will remain for a considerable time to come," he said.

"In the recent past when it seemed that inflation was under control, the authorities, in their wisdom, weakened the position by approving significant increases in state controlled services. For instance the latest approval in energy price increases could add up to one percentage point to inflation in the next number of months.

"These price increases are detrimental to the business community and invariably filter through to overall higher costs in the economy and in turn to consumer prices."