Rise in Company Formation Does Nothing to Help Inflation

When the recession first hit, it was widely thought that the company formation sector would be badly affected. However, as a result of redundancies and a hostile job market, the number of people wanting to form their own company actually increased throughout 2009. However, according to a recent report this has done little to help inflation.
According to figures released from the Office of National Statistics, inflation is rising across both the consumer price and retail price index.

Mark Sherwood, enterprise director of the BCC, comments: ‘ While the rise in inflation, is more pronounced than we originally thought it would be, with the exponential fall in prices across a number of sectors this year, it is hardly surprising. Ultimately, many economists are predicting a continued rise in inflation in the beginning of 2010, when the VAT rate returns to its pre-recessionary level, before we see any decrease in these figures.”