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The recent rise in interest rates could seriously damage small businesses, an expert has warned.
Last week the Bank of England again increased the base rate, from 5.5 per cent to 5.75 per cent.
John Bridge, of the Peterborough Chamber of Commerce, told Peterborough.net: "It is all very well for the MPC [Monetary Policy Committee] to warn of the dangers of inflation, however we remain unconvinced that they appreciate the severity of the impact this further rise will have on our SMEs.
"These rising interest rates are crippling small business owners, for many of whom the security of their business, home and future are all intertwined with such vigour that each 0.25 point rate increase is felt with significantly more than the minor tremor experienced by larger companies."
He also argued that "any good intentions on the part of Gordon Browns new government risk being severely hampered by the spiralling costs that the MPC is inflicting on Peterboroughs small and medium business owners".
The rate rise, the fifth in less than a year, comes at a time when the typical UK business start-up already feels under huge financial management pressure.
A recent survey by accounting software and services provider MYOB found that 58 per cent of respondents felt that financial management pressures, such as those associated with tax planning, had increased over the last year.
As reported by smallbusiness.co.uk, Wayne Schmidt, general manager of MYOB, said: "The financial burden… is reaching a tipping point and is affecting the profitability and performance of many businesses up and down the country."
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