Business still concerned by interest rates despite Bank’s second consecutive hold – Chamber

Interest rates remain one of the top concerns among Greater Birmingham businesses despite the Bank of England announcing a second consecutive hold at 5.25 per cent, business leaders said today.

Despite the decision to hold interest rates for the second month running, they remain at a 15-year high.

Greater Birmingham Chambers of Commerce said heightened rates are hampering many firms with debt repayment, while the knock-on effect for consumer spending is impacting on industries such as hospitality.

Cameron Uppal (pictured), policy and public affairs advisor at Greater Birmingham Chambers of Commerce, said: “Whilst businesses will be happy to see that the Bank of England have decided not to raise interest rates, there will be a level of concern with the Bank’s decision to hold interest rates at the highest levels seen in 15 years.

“Many of the firms that we speak to across the Greater Birmingham region tell us about the difficulties they face as they are struggling with debt repayment.

“Heightened rates have no doubt had an impact on household spending which in turn has dented consumer spending – a number of hospitality firms we work closely with have continuously expressed their concerns around this trend.

“It is telling than in our last Quarterly Business Report, 18 per cent of firms cited interest rates as more of a concern to their business than three months ago.

“With the backdrop of global oil prices rising and the conflict in the Middle East there has been intensified impact on inflationary pressures. However, the use of interest rates as a blunt instrument to counteract inflation has likely had a knock-on impact for those businesses struggling to repay loans and impact levels of cash flow.

“It is crucial that the businesses that we represent have the stability and confidence to plan for the future – tackling ingrained skills shortages and investing in game-changing infrastructure projects will all help to drive investment and bolster confidence.”

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