Chamber calls for business stability following interest rate rise
Firms across the West Midlands face “deepening concern ” over the rise in interest rates to five per cent amid fears that the Bank of England is using a “blunt tool ” to tackle inflation.
The alert was sounded today by Greater Birmingham Chambers of Commerce in the wake of the Bank 's decision to increase interest rates for the 13th consecutive time to five per cent as the cost of living crisis eats into household budgets.
But Cameron Uppal, Policy and Public Affairs Adviser for the Greater Birmingham Chambers, warned today that the business sector needed a period of greater stability to allow firms to plan ahead with more certainty.
Cameron said: "The news that the Bank of England have increased rates to 5 per cent is an area of deepening concern for businesses across the region who were hoping to see more stable macroeconomic conditions to allow them to plan with conditions and certainty in the months ahead.
“The rise in interest rates comes as no surprise, given many city analysts predicted such a rise to offset the yesterday's news that CPI inflation has remained constant.
“Data from our latest Quarterly Business Report reveals that concerns around interest rates remain very much at the fore for many firms and yesterday 's decision will do little to calm those fears as a number of businesses struggle to repay loans and mortgages.
“Within this context, it 's clear that we cannot rely on blunt monetary policy tools to counter the impact of inflation - fiscal intervention is also required in order to offset the crippling cost pressures firms are currently facing. ” Official data this week revealed that inflation was stuck at 8.7 per cent in May, prompting the Bank of England to raise its benchmark rate half a per cent from 4.5 per cent.
The Bank rate is already at its highest level for 15 years, rising consistently since December 2021 in response to the soaring cost of living.