Commenting on today’s interest rate decision by the Bank of England’s Monetary Policy Committee, Suren Thiru, Head of Economics, at the British Chambers of Commerce (BCC), said: “The decision to raise interest rates, while expected, looks ill-timed against a backdrop of growing domestic and global headwinds, including Russia’s invasion of Ukraine.
“While interest rates remain low by historic standards, the latest rise will be viewed by many as a further step in a prolonged period of aggressive monetary tightening at a time when consumers and businesses are struggling under a myriad of rising cost pressures.
“Increasing interest rates will do little to curb the global causes behind this inflationary surge and risks intensifying the headwinds facing the UK economy by damaging confidence and deepening the financial squeeze on consumers and businesses.
“Instead, the focus should be on using next week’s Spring Statement to tackle the escalating cost of doing business crisis by delaying the national insurance rise and introducing a temporary energy price cap for small businesses.
“This would give firms the headroom to keep a lid on prices, protect jobs and make investment that is so vital to sustaining our economic prospects.”