Latest interest rate rise could dent consumer demand - Chamber
The Bank of England 's decision to raise interest rates to 4.5 per cent could have a worrying impact on consumer demand, business leaders have warned.
The Bank 's Monetary Policy Commission voted yesterday to raise interest rates by half a point - a 12th consecutive increase - as it seeks to dampen double-digit inflation.
However, Greater Birmingham Chambers of Commerce warned that local businesses who are already suffering from decreased consumer demand could suffer further as a result.
Cameron Uppal (pictured), policy and public affairs advisor at Greater Birmingham Chambers of Commerce, said:
“Whilst we recognise the sustained impact of high inflation is having on local businesses, the Bank of England 's decision to raise rates will face considerable scrutiny in the current context.
“Using a blunt instrument to counteract inflation is likely to have a knock on impact for those businesses struggling to repay loans and impact levels of cash flow.
“Raising rates will also have an impact on household spending which in turn is likely to dent consumer spending - a number of hospitality firms we work closely with have expressed their concerns around this worrying trend.
“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. ”