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.’
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