Business leaders in Birmingham have called on the government to take control of the economy by investing in skills and infrastructure, rather the Bank of England’s “balancing act”.

Greater Birmingham Chambers of Commerce (GBCC) said moving away from a reliance on consumer spending was more likely to create a path to prosperity.

Paul Faulkner (pictured), chief executive of Greater Birmingham Chambers of Commerce (GBCC), was speaking after the announcement that inflation rose from 3 per cent to 3.1 per cent in November, the highest figure in nearly six years, as the squeeze on households continued.

This will force Bank of England governor Mark Carney to write a letter to Chancellor Philip Hammond to explain why inflation isn’t close to its 2 per cent target.

Mr Faulkner said: “Inflation levels crept above the 3 per cent mark for the first time in almost six years as we saw a notable rise in oil prices throughout November – mainly as a by-product of the lower value of the pound.

“Markedly, UK earnings are only rising by around 2 per cent which means households are still feeling the squeeze in the run up to Christmas.

“In his letter to the Chancellor, Mr Carney will no doubt stress that inflation is now close to its peak – however, a key trend we saw in our latest Quarterly Business Report was that local firms are still facing pressures to raise prices which in turn, could produce upward inflationary pressures and continue to have a knock on effect on consumer output.

“Moving away from a reliance on consumer spending and actually investing in skills and infrastructure is more likely to create a path to prosperity than relying on the Bank of England to maintain its balancing act of keeping a lid on inflation whilst also getting households to spend more of their hard earned cash.

“We will be discussing this topic and others at the official launch of the report  which takes place on Monday, January 16, at Birmingham City University.”