Raj Kandola
Raj Kandola

The Government must act decisively to offer support to businesses following the announcement by the Bank of England that interest rates are to rise to 1.75%, regional business leaders have said.

The move will see rates reach their highest level for a quarter of a century.

Greater Birmingham Chambers of Commerce (GBCC) said businesses were already struggling to hire and facing soaring energy prices and huge costs pressures.

Raj Kandola, the GBCC’s head of policy, said:

“As businesses grapple with record levels of inflation, the Bank of England was left with little room for manoeuvre as interest rates were raised to their highest level in a quarter of a century.

“However, the move will do little to quell the rise in wholesale gas prices which have been fuelled by the conflict in Ukraine and the Bank’s projections for the year ahead will offer little respite to firms up and down the country attempting to navigate a wave of economic uncertainty.

“On the ground, the picture remains mixed. Data from our latest Quarterly Business Report revealed domestic demand and turnover projections remain strong, however, the longer inflationary pressures continue to bite, consumer spending will continue to take a hit.

“That’s why the Government needs to act decisively and offer fiscal support for those businesses that are struggling to hire and grappling with soaring energy prices and huge cost pressures – immediate measures such as cutting up front costs for businesses, expanding the Shortage Occupation List and removing VAT from energy bills would be a sensible start.”

Raj Kandola

The Bank of England said the move had been necessary due to predictions inflation could reach 13%.

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