The Bank of England (BoE) has raised the base rate of interest to the highest
level in 14 years.
The BoE raised interest rates for the tenth consecutive time on 2 February with a
half point increase taking the base rate from 3.5% to 4%.
The decision was taken after the Monetary Policy Committee (MPC) voted by a
majority of seven to two to increase the base rate by 0.5%.
The MPC said it is confident that inflation has peaked and its approach is the
right route to get it back under the 2% target.
David Bharier, Head of Research at the British Chambers of Commerce (BCC), said:
'The Bank's decision to raise interest rates for a tenth consecutive time
continues its hard-line approach to inflation, but this is not without
serious side-effects.
'Our research shows that while inflation remains by far and away the top
concern for businesses with 80% citing this in Q4 2022, concern about
interest rates has risen sharply with 43% now citing this.
'With the Bank expecting inflation to slow to around 4% by the end of the
year, further rate rises could now simply add to the risk of a deeper
recession, outweighing the benefits.'
Internet link: Bank of England website BCC website