FILE PHOTO: Men walk past a retail unit available to rent and a store offering sale items on Petticoat Lane, in London, Britain, August 23 2023. REUTERS/Peter Nicholls/File Photo
LONDON (Reuters) – The higher cost of borrowing is hurting almost half of small firms in Britain, according to a survey published on Monday, ahead of an expected 15th back-to-back increase in interest rates by the Bank of England later this week.
The British Chambers of Commerce said 46% of firms it surveyed said the increase in rates so far was having a negative impact, while 45% said they were not directly impacted.
Retailers and hospitality firms were among those feeling the hit the hardest, the BCC said.
Shevaun Haviland, director general of the lobbying group, said business investment was being held back because of the burden of higher debt bills.
“The Bank of England has indicated rates are nearing their peak,” she said. “Businesses need clarity and certainty this week, that an end to the cost-of-borrowing pressures are really on the horizon.”
The BoE is expected to raise Bank Rate to 5.5% from 5.25% on Thursday, extending the monetary policy tightening that it began in December 2021 as it tries to dampen the inflationary pressures in the economy. But many economists and investors think the BoE will go on pause after Thursday’s expected move.