Despite being the first increase in almost four years, last week’s interest rate rise of 0.25 per cent to 3.75 per cent was given a cool reception by business organisations such as the Confederation of British Industry (CBI) and the British Chambers of Commerce (BCC).
Joining them in warning that the increase may cause the tentative economic recovery to stall is the Institute of Chartered Accountants in England and Wales, which has highlighted the impact that the Bank of England's decision could have on small- and medium-sized enterprises' (SMEs) growth plans.
The Institute's Enterprise survey published last month (of 1303 Chartered Accountants working in businesses employing up to 1000 people) revealed that 87 per cent plan to grow their business over the next two years. Of these, around one in five (21 per cent) plan to achieve growth through an injection of funding.
