LCCI reacts to Bank of England Interest Rate rise

Thursday 23 March 2023

Richard Burge, Chief Executive of London Chamber of Commerce and Industry (LCCI) said: “The decision by the Bank of England’s Monetary Policy Committee to raise the base rate of interest to 4.25% was to be expected given yesterday’s disappointing inflation figures. While this will mean higher bower costs, the real worry is in the rise of core inflation. Now many London businesses will once again be facing higher – and unexpected – cost pressures, which require new credible action from the Government, not just the Bank of England. So we must ask: what is the Government’s plan to address this challenge?

“The absence of any concrete measures in last week’s Budget in providing help with energy costs and business rates reduction means firms continue to face the toxic mix of high inflation, elevated borrowing costs, and reduced consumer spending. Simply ‘waiting’ for record-high levels of inflation to drop towards the end of the year is not good enough, especially for small and medium size businesses who have spent much of their cashflow and reserves battling to stay afloat over the past three years – first through the pandemic and now amidst high cost pressures.

“It is not too late for the Government to enact additional pro-business policies that will kickstart London’s recovery. Ministers need to ensure that businesses can rely on a sustainable customer base, access to reasonable working capital and a favourable economic climate to increase productivity and spark a return to growth. This will allow the Government to deliver on its promise to create favourable economic conditions for growth, macroeconomic stability and shared prosperity in the longer-term.”

ENDS