Inflation forecast to fall below 2 percent

West & North Yorkshire Chamber of Commerce today welcomes the news that inflation is forecast to fall below two per cent in the coming months.

The Office for Budget Responsibility (OBR) revealed its improved forecast ahead of this year’s Budget and predicted better than expected growth of 0.8 per cent.

The Chamber also welcomed the Chancellor’s announcement that he would be raising the VAT threshold from £85,000 to £90,000 as well freezing alcohol duty for an additional 12 months – two measures that will particularly benefit the hospitality industry.

There was additional positive news that the fuel duty freeze would be extended for an additional 12 months and that Government would publish draft legislation expanding the practice of full expensing to include leased assets.

Additionally, given the strength of Yorkshire’s creative and film industries, news that film studios will benefit from a 40 per cent relief on business rates until 2034, combined with a new tax credit on small independent films and further tax relief for visual effects, are all welcome news for the region’s economy.

Our strong life sciences sector will also benefit from the £35m investment in disease treatment.

However, the lack of any announcements on transport infrastructure is something that will disappoint businesses in the region who are eager to learn of future spending plans.

Amanda Beresford, chair of West & North Yorkshire Chamber of Commerce, said: “The improved economic forecasts from the OBR are welcome pieces of news given how concerning recent figures have been.

“Declining inflation and improved growth forecasts are encouraging updates after so many months of uncertainty.

“Measures to increase the VAT threshold will save many businesses from paying extra tax and freezes on fuel duty will help control companies bottom lines.

“It was also refreshing to see our creative and life sciences industries handed support, particularly given Yorkshire’s strengths in these sectors.

“However, what was missing was a long-term plan for our infrastructure. The cancelling of HS2 has left a gaping hole about our future connectivity and until this is addressed our productivity will continue to struggle.”

Shevaun Haviland, Director General of the BCC, said: “Following the Autumn Statement this Budget was always set to deliver less for business although changes to National Insurance will provide some momentum. 

“However, beyond this there were no major announcements to help shift the dial on conditions for business.  

“The clock is now ticking to the General Election – and this Budget could be the last fiscal event before voters go to the polls.  

“Business confidence is improving but the coming months will remain challenging for many companies. It is vital that the economy remains front and centre of the campaign to come.”