Chamber comments on the latest interest rates rise

The Bank of England has raised interest rates to 5.25%, the 14^th consecutive rise in interest rates.

 Paul Butterworth, CEO at Chambers Wales South East, South West and Mid, said:

“Today the Bank of England has decided to raise interest rates again to control inflation that has remained stubbornly high for many quarters. The Bank of England must make difficult decisions to avoid out of control inflation and keep the economy stable. However, we are yet to see any real fiscal benefits to businesses or any reduction in housing or food inflation which continues to drive the cost-of-living crisis which in turns sustains the cost-of-doing-business crisis. 

 “Governments need to do more to further efforts in bringing prices down for businesses in the short and medium term. It is important for businesses to be able to borrow effectively and higher interest rates make this more difficult. A balance must be struck to ensure businesses get fair opportunities to grow.

 “More must be done to ease pressure on Welsh businesses and hand them economic stability. Wage pressure and the continued skills gap alongside high inflation represents the largest barrier to growth. Our Quarterly Economic Survey for Q2 2023 indicated that 65% of businesses found inflation to be more of a concern than it was three months ago. This indicates that inflation still has a long way to go to return to normal.

 “We encourage policymakers to consider ordinary people and businesses, and those who experience economic difficulties much more acutely, when looking at economic policy like increased interest rates and the impact of inflation. We are committed to lobbying for better and fairer economic conditions for Welsh businesses.”