Commenting on today’s interest rate rise, James Brougham, Senior Economist at Make UK, said:

“Manufacturers won’t be surprised by today’s hike given the level of inflation in the economy and, the unprecedented, rampant levels being endured by industry. With so much inflationary pressure stacked in the supply side of the economy, however, there’s concern that the Bank may be taking a peashooter to a gunfight and be impotent to curtail inflation by discouraging consumer spending through base rate adjustments.

“However, while interest rate rises are helpful in preventing inflation becoming built-in to employers wage setting procedures, the Bank of England can’t do anything about the other causes in increasing cost of doing business. That is something only government policy can fix so, if the UK is to escape a recession, government needs to look at tax reductions on energy and other costs to help firms stay in business. Measures to boost growth must be the number one priority for the new Prime Minister from day one.”