Latest interest rate hold does little to reassure firms - Chamber

The Bank of England’s decision to hold interest rates at 5.25 per cent will do little to reassure firms over cost pressures, business leaders said today.

The Bank left interest rates on hold for the third successive meeting yesterday with governor Andrew Bailey saying it is “too early to start speculating about cutting interest rates, we have got to see more progress.”

Three members of the Bank's Monetary Policy Committee (MPC) voted for an increase in borrowing costs, but they were outvoted by the remaining six members. 

Greater Birmingham Chambers of Commerce said the heightened rates will have a knock-on effect for businesses who are struggling to repay loans and are hoping to improve cash flow levels.  

Cameron Uppal (pictured), policy and public affairs advisor at Greater Birmingham Chambers of Commerce, said: “With inflation starting to fall over previous months, the Bank of England’s decision to hold interest rates at the highest level we’ve seen in 15 years will do little to reassure firms that monetary policy is likely to loosen any time soon.

“It is telling that in our last Quarterly Business Report, 15 per cent of firms cited interest rates as more of a concern to their business than three months ago. With many grappling with spiralling costs, the continued high interest rates that we have seen has likely had a knock-on impact for those businesses struggling to repay loans and impact levels of cash flow.

“Whilst there were some welcome inclusions in last month's Autumn Budget, it is crucial that we continue to lobby the Government to tackle ingrained skills shortages and invest in game-changing infrastructure projects in order to reduce the cost pressures firms are facing.

“The businesses that we represent are crying out for the stability and confidence to plan for the future.”