Renewed calls for fiscal intervention as interest rates rise again

Business leaders today reiterated a call to Government to help firms struggling with mounting cost pressures - as the Bank of England announced a fifth consecutive interest rates hike.

UK interest rates have risen further as the Bank of England attempts to stem the pace of soaring prices.

Rates have increased from 1 per cent to 1.25 per cent, pushing them to the highest level in 13 years.

It comes as finances are being squeezed by the rising cost of living, driven by record fuel and energy prices.

Erin Henwood (pictured), policy advisor at Greater Birmingham Chambers of Commerce, said: “The Monetary Policy Committee attributed their decision to raise interest rates to ongoing signs of robust cost and price pressures - including the current tightness of the labour market - and the risk that such pressures could become more persistent.

“Early analysis of our Q2 Quarterly Business Report reveals that local businesses are concerned about the impact of inflation and those expecting their prices to increase in the next three months have both hit record highs.

“Whilst the Bank of England considers further tightening to reduce the risks of a more extended and costly tightening cycle later, the Government must take fiscal action in the immediate term to help firms struggling with mounting price pressures and eyewatering overheads. ”

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