Interest rates raised for 12th time in a row

12 May 2023

UK interest rates have been raised for the 12th time in a row in a further attempt by the Bank of England to slow rising prices.

The increase to the Bank's base rate from 4.25% to 4.5% means rates are now at their highest level since the height of the global financial crisis in October 2008.

The rise will mean higher mortgage payments for some homeowners, while people looking for loans will face higher borrowing costs. However, high interest rates can benefit savers.

Reacting to the decision, David Bharier, Head of Research at the British Chambers of Commerce (BCC), said: 'The unprecedented and prolonged spike in inflation has been devastating for many small firms who have been struggling to absorb continued price rises.

'But interest rate rises can also have serious negative effects too, particularly for firms looking to borrow to manage their cashflow problems. The combination of high interest rates and high inflation would mean the worst of both worlds for many small firms.

'The UK government should consider further action to break this vicious cycle by boosting economic growth through investment in infrastructure, skills training and global trade.'