The Bank of England’s latest interest rate rise comes with ‘potentially serious side effects’ for the economy, Shropshire Chamber of Commerce says.

Businesses which are relying on debt to keep afloat after three years of turbulent times will be disproportionately impacted by the decision, according to deputy chief executive Ruth Ross.

“Mortgage holders will of course also be concerned by the hard-line approach which the Bank is taking to tackling inflation,” she said.

“Shropshire businesses will also need to see concrete action in the upcoming Budget to promote growth, including plans on infrastructure, tax, skills, and trade.” 

David Bharier, head of research at the British Chambers of Commerce, added: “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% saying it is an issue. 

“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. 

“The main driver of inflation for most firms is energy costs, but this requires a clear policy solution, with immediate relief for those most affected and longer-term structural changes to ensure this market failure does not occur again.”