Budget must offer firms a lifeline after interest rates hike - Chamber

Interest rates have increased for the third time in four months as the Bank of England strove to calm the rise in the cost of living.

The rise to 0.75 per cent from 0.5 per cent comes as prices climb faster than pay, squeezing household finances.

Interest rates are now at their highest level since March, 2020, when the Covid pandemic began.

Energy bills and food costs are increasing and there is concern the war in Ukraine will push prices up further.

Inflation, the rate at which prices rise, is currently at 5.5 per cent, well above the two per cent targeted by the Bank.

Erin Henwood, policy advisor at Greater Birmingham Chambers of Commerce, said: “Yesterday 's interest rate hike announced by the Monetary Policy Committee comes as little surprise given the protracted period of high inflation we are currently experiencing.

“In their summary, the MPC unequivocally condemned Russia 's invasion in Ukraine, noting that the crisis has resulted in further significant increases in energy and commodity prices.

“Concerns were also flagged that ongoing military action would continue to exacerbate global supply chain disruption and cast the long-term economic outlook into uncertainty.

“Interest rate rises and increasing economic uncertainty will be worrying for firms in Greater Birmingham, half of whom are expecting their prices to increase in the coming months according to our latest Quarterly Business Report.

“With both this month 's inflation figures and the Chancellor 's Spring Statement due next week, it is crucial that the Chancellor uses this opportunity to provide a lifeline to businesses and households alike to help them survive the coming months. ”

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