Commenting on today’s Bank of England interest rate rise, David Bharier, Head of Research at the British Chambers of Commerce (BCC), said:
“The Bank’s decision to raise interest rates for a 10th consecutive time continues its hard-line approach to inflation, but this is not without serious side-effects.
“Those impacted most by today’s decision will be mortgage holders and businesses reliant on debt to keep afloat after three years of economic shocks.
“Our research shows that while inflation remains by far and away the top concern for businesses with 80% citing this in Q4 2022, concern about interest rates has risen sharply with 43% now citing this.
“With the Bank expecting inflation to slow to around 4% by the end of the year, further rate rises could now simply add to the risk of a deeper recession, outweighing the benefits.
“The main driver of inflation for most firms is energy costs, but this requires a clear policy solution, with immediate relief for those most affected and longer-term structural changes to ensure this market failure does not occur again.
“Businesses will also need to see concrete action in the upcoming Budget to promote growth, including plans on infrastructure, tax, skills, and trade.”