Efforts must be made to ensure that today’s first increase in interest rates for only the second time in a decade to 0.75 per cent does not result in an unintended barrier for business.
Greater Birmingham Chambers of commerce (GBCC) said the increase, from 0.5 per cent, will test how robust consumer confidence is.
Paul Faulkner, the GBCC’s chief executive, said: ““This rise had been widely expected, as demonstrated by the limited market reaction to today’s announcement. CPI inflation was above the Bank of England’s two per cent target in June (at 2.4 per cent), the labour market continues to tighten and the unexpected slowdown in economic growth seen in Q1 is now seen as having been heavily influenced by the ‘Beast from the East’.
“However, it is notable in that it is only the second rise in the almost a decade since the Bank slashed rates following the financial crisis and, while improved, questions remain over how robust consumer confidence and spending will be moving forwards.
“There is still plenty of uncertainty out there and many expect the Bank to be cautious and limited in their intentions for future rates rises. We must ensure that Bank of England and other stakeholder policy supports and enables business investment and does not act as an unintended barrier.
“Locally, we continue to see positive trends in business confidence with our Q2 Quarterly Business Report indicating a strong outlook for Greater Birmingham’s businesses.
“Brexit-related change and uncertainty remains a key area of concern for businesses. We are continuing to encourage businesses to take steps to understand and prepare for Brexit-related risks as early as possible. The GBCC’s Brexit Toolkit is a comprehensive free resource that can help.”
“We will also shortly be launching the GBCC’s Invest to Grow campaign which aims to help businesses boost productivity through investment in innovation, R&D, tech and machinery.”