Reacting to the Bank of England decision to raise the base rate to 4.5%, BCC Head of Research, David Bharier, said:

“The decision to raise the interest rate for the 12th consecutive time to the highest rate since 2008 shows the Bank is continuing to pull this lever hard as the rate of inflation remains stubbornly high.

“The unprecedented and prolonged spike in inflation has been devastating for many small firms who have been struggling to absorb continued price rises.

“But interest rate rises can also have serious negative effects too, particularly for firms looking to borrow to manage their cash flow problems. Our most recent Quarterly Economic Survey found that interest rates were a concern for 47% of hospitality firms. The combination of high interest rates and high inflation would mean the worst of both worlds for many small firms.

“The UK Government should consider further action to break this vicious cycle by boosting economic growth – through investment in infrastructure, skills training, and global trade.”