Reacting to the Bank of England’s latest interest rate decision, David Bharier, Head of Research at the British Chambers of Commerce, said:

“Today’s decision to hold the interest rate at 5.25% was widely expected. Businesses will be hopeful that tentative signals from the Bank translate into a rate cut later this year.

“However, for many SMEs borrowing costs remain very high – and today’s hold means another month of hesitation on investment and growth.

“Our research shows that business concern about interest rates is easing, in part due to the period of stability since last August. Our latest survey showed 35% of firms worried about the cost of borrowing, down from 39% at the end of last year. But these remain high levels of concern, compared to pre-pandemic.

“Tomorrow’s GDP figures could bring some welcome news, but economic conditions remain tough. Alongside high interest rates, firms are grappling with rising costs, skills shortages and further trade friction with the EU.

“Business confidence has been gently ticking up as they see a way out of the inflation and interest rate double whammy, but policymakers need to support this with a clear plan for growth and stability.”