Inflation down but recession risk now high, IPPR warns
IPPR has responded to today’s figures on CPI inflation for July.
Dr George Dibb, head of IPPR’s Centre for Economic Justice, said:
“It’s good news that headline inflation is lower, especially with energy bills coming down, but there is a very real risk that a recession may soon overtake price rises as the main economic concern. Other countries have brought inflation under control quicker than in the UK, with more support for households and workers avoiding unnecessary pain.
“Interest rate hikes take up to a year and a half to fully filter through to the economy. One year from now, ‘pass the parcel inflation’ might be over, but further interest rates might also have killed the recovery - there are already signs of falling consumer confidence and rising unemployment.
“Even today it’s important to note that while inflation might be falling, prices are not. Households are still struggling with high prices, especially those on the lowest incomes. By supporting households and businesses with energy costs, making businesses play their part, and supporting renters, countries like Spain have shown that inflation can be brought down without the economy going into tailspin.”
Dr George Dibb is available for interview. He is an IPPR associate director and head of IPPR’s Centre for Economic Justice