British Chambers warn of tough year ahead as interest rates stay high

The Governor of the Bank of England Andrew Bailey pictured at the Chamber's Business Breakfast with Craig Simpson (left) and Dr Kelly (right).

THE Bank of England has held interest rates at 5.25%.

This is the third time in succession the Bank has decided to leave the rate unchanged, which is at hits highest level for 15 years.

Six members of the Monetary Policy Committee wanted to hold the rate, whiule three others wanted to raise it to 5.5%.

Bank Governor Andrew Bailey, who was the guest of honour at a Chamber breakfast meeting a couple of years ago, said we have come a long way in bringing inflation down, but there is still some way to go.

Reacting to the latest Bank of England interest rate decision, David Bharier, Head of Research at the British Chambers of Commerce, said:  “While a cut in the interest rate could have provided some relief for firms ahead of Christmas, today's decision to hold it at 5.25% was expected and allays fears of further rises. 

 “UK businesses have been faced with the twin shock of an inflation crisis and increased borrowing costs. Around half of the businesses we survey report a direct negative impact from the current interest rate, while only around one in ten see a benefit. 

“The BCC’s latest Economic Forecast expects only a 0.25% point cut in the interest rate for the whole of 2024, although businesses need to be prepared for any unexpected changes given the uncertain policy landscape. 

“SMEs have been operating in an uncertain climate for too long, with policies constantly chopping and changing over the past few years. They need to see clear direction from decision makers, creating a roadmap for business that boosts confidence and investment.”