Interest Rates Rise a Blunt Instrument and Further Headache for Business

Interest Rates Rise a Blunt Instrument and Further Headache for Business

Commenting on today’s Bank of England interest rate rise, David Bharier, Head of Research at the British Chambers of Commerce (BCC), said:  

“The decision to raise the base rate to 3% comes as no surprise following the market turmoil caused by September’s mini-budget.

“The Bank has laid down a clear marker that it intends to bring inflation down by placing further pressure on consumer demand.

“But raising the interest rate is a very blunt instrument to control inflation that is largely the result of global factors, including soaring energy costs and supply chain disruption.

“This is further bad news for businesses who find themselves trapped between rising costs of raw materials, energy and borrowing, and weakening consumer demand.

“The Bank is now clearly indicating the UK economy is set for a prolonged recession. Our own research shows that business confidence has been falling at an alarming rate over recent months, driven by runaway inflation.

“But even as evidence of a recession mounts, cost pressures on businesses may yet continue as the energy price cap expires next April.

“With the Chancellor and Prime Minister both signalling that the Autumn Statement is likely to result in spending cuts and tax rises, businesses will be extremely worried about what the future holds.

“It is crucial that the Government sets out a long-term plan that stabilises the economy and focuses on growth.”

Share this news story:

Other News

01-10-2025
Teams honoured with national awards

Colleagues at Lincolnshire Co-op are celebrating a successful night after winning in two categories at the prestigious People...

Read More
01-10-2025
Lincolnshire Agricultural Society Supports Local Food Bank for Lincolnshire Day

Lincolnshire Agricultural Society (LAS) donates to Lincoln Food Bank to support local families in need – marking Lincol...

Read More

Join our ever-growing membership base

Become a member
Our Patrons