Bank of England Announce Interest Rate Rise
05 May 2022
Published in: Black Country Chamber of Commerce News
In an effort to stem the pace of rising prices, the Bank of England today announced that interests would rise from 0.75% to 1%.
This is the fourth consecutive rise since December, interest rates are now at the highest level since 2009, this is an effort to respond to rapid inflation, which is rising at its fastest pace for three decades due to supply chain issues globally and escalating costs for energy and food.
With the Bank suggesting inflation could peak at 10% by the end of 2022 and warnings recovery growth post-COVID could falter next year, today’s announcement will likely have little effect on the rising costs many businesses have experienced over recent months.
Corin Crane, CEO of the Black Country Chamber of Commerce said:
“The decision to raise interest rates will cause considerable alarm among households and businesses given the rapidly deteriorating economic outlook and mounting cost pressures many are facing. “The Bank of England face an unenviable trade-off between soaring inflation and a wilting economy. However, higher interest rates will do little to address those global headwinds or supply constraints which are driving this inflationary surge. It also raises the risk of recession by damaging confidence and intensifying the financial squeeze on businesses and consumers.
“With monetary policy continuing to tighten, it is vital the fiscal policy is now loosened to ease the crippling cost pressures faced by consumers and businesses and to support wider economic activity. Urgent action is needed to limit the unprecedented surge in costs facing businesses, including financial support for those struggling with soaring energy bills.”
More information on the Bank of England's decision to raise interest rates can be found here.
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