Businesses warn the BoE not to raise interest rates, as growth falls

Growth in Britain’s economy has slowed in the second quarter of this year, while businesses voice concerns about interest rate rises.

The British Chambers of Commerce surveyed 7,000 businesses for its quarterly Economic Survey and found business performance slipped on key measures such as investment and overseas sales in the last quarter, but are still above pre-recession values.

Around 22% of businesses in the service sector, and 18% of manufacturing businesses said they were concerned about interest rate rises.

John Longworth, Director General of the BCC, said: “These results reinforce the case against the Bank of England making any hasty decisions on raising interest rates in the very short-term.

“By driving up the cost of credit for fast-growing firms, many of whom do not sit on the same healthy cash piles as their more established counterparts, early rate rises may mean more limited growth ambitions among the very firms we are counting on to drive the recovery.

“We must nurture the business confidence we are seeing at present by giving firms the security of working in a low interest rate environment for the foreseeable future – with eventual rises both moderate and predictable.”

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