Hear our thoughts: UK’s inflation drops unexpectedly from 2.9% to 2.6%
Salvador Amico features in Finance Monthly as he shares his thoughts on the first fall in inflation since October 2016 and what to look out for in the months to come.
Salvador Amico, Partner and head of the Brexit team at Menzies LLP says:
“The fall in the rate of inflation has come as a surprise but businesses, consumers and the Bank of England alike are unlikely to be celebrating too much at this stage.
Future economic and market driven volatility is still expected. Inflation rates could creep back up and the pound will remain volatile, hindering long-term investment plans. To avoid losing out, businesses should take steps to minimise their exposure to such volatility by re-assessing their supply contracts, distribution networks and hedging against currency fluctuations.
To date, there has been a reluctance from businesses to pass on extra costs to the consumer in the form of price rises, but this could become harder to avoid in the future. In the meantime, businesses will remain focused on removing cost where it is possible to do so by renegotiating contracts and relocating supply chains closer to home.”