|
Further increases in interest rates could hamper the growth of small businesses, according to one industry expert.
Frank Peck, an economic advisor at the Forum of Private Business (FPB) commented that "inflation unexpectedly rose in March to 3.1 per cent, moving well away from the target for the Treasury".
He explained that it was "more difficult for smaller firms to absorb short term variations in these costs".
This is particularly true of those undergoing company formation who do not yet have financial reserves in place to deal with such rises.
With interest rates at their highest level for seven years, the FPB has urged business start-ups and other small firms to carefully examine all their borrowing options and shop around to get the best deal on fixed-rate loans.
The British Chambers of Commerce (BCC) recently called for the Bank of England to adopt a "cautious and gradual approach" in its setting of the base rate at its forthcoming monthly meeting.
David Kern, economic adviser for the BCC, said there was a "distinct danger that ratcheting up interest rates would worsen unnecessarily the pain facing UK businesses".
Mr Kern acknowledged that further rate increases might become unavoidable, but warned that "we are now approaching quickly the point where there is a heightened danger of harmful monetary overkill."
See copyright notice
| Other
Top Business News Stories |
|
Business
News 
