Business West responds to increase in interest rates

Commenting on today’s interest rate decision by the Bank of England’s Monetary Policy Committee, Phil Smith, Managing Director of Business West, said:

“The government’s decision to raise interest rates by 0.25% will increase pressure on businesses during an already challenging time where skyrocketing material costs and a difficult labour market are hurting business growth and profitability.

“While the increase indicates the Bank’s efforts to tackle inflation, a higher interest rate seems unlikely to address wage or input prices which have been surging since the start of 2021.

“The increase will inevitably impact businesses as consumers with debts will not have as much discretionary income to spend and those companies reliant on overdrafts or variable rate loans will be hit with higher interest costs, impacting their bottom line.”