Commenting on the latest figures from the Office for National Statistics, showing inflation was at 9 per cent in the 12 months to April, up from 7 per cent in March, Scott Knowles, East Midlands Chamber chief executive, said: “The 2 per cent jump in inflation between March and April is eye-watering, and underscores the growing cost of living crisis facing households, and the damaging squeeze on firms’ ability to invest and operate at full capacity.
“The marked acceleration in the headline rate in April reflected the energy price cap rise, increase in national insurance contributions and the reversal of the VAT reduction for hospitality in the month.
“The scale at which inflation is damaging key drivers of UK output, including consumer spending and business investment decisions – with cashflow falling for a net three per cent of our region’s firms – is unprecedented.
“After confirmation that GDP shrank by 0.1 per cent in March, this means there is a chance the UK will be in recession by the third quarter of the year – unless Government pulls all the levers available to it in order to alleviate the cost of doing business and the cost of living crises, which are essentially two sides of the same coin.
“While inflation may moderate a little over the summer, April’s inflationary surge is likely be surpassed in October as the expected energy price cap rise in the month lifts inflation above ten per cent.
“Soaring inflation means a June interest rate rise is inevitable.
"However, higher interest rates will do little to address the global factors driving this inflationary surge, and risks undermining confidence and aggravating the financial squeeze
on consumers and businesses.
“Although surging global energy and commodity prices aren’t typically something in the UK Government’s direct control, more needs to be done to help consumers and businesses through this difficult period.
"This should include reversing the rise in national insurance contributions and cutting VAT on business energy bills to 5 per cent.”