East Midlands Chamber has said the Bank of England’s decision to increase the interest rate by a quarter point to 4% from 3.75% – the first rise in three years – could hinder businesses looking to borrow to invest to grow.
East Midlands Chamber Chief Executive Scott Knowles said: “While the Bank of England will have been keen to mitigate the soaring inflation we’re seeing, which now sits far too high at 3.5% and a mile off Government’s 2% target, businesses considering borrowing so they can invest to grow will see this rise in the interest rate to 4% as a hindrance to their investment plans.
“The cost of doing business remains high and while borrowing will be an avenue some businesses may look at to enable investment, policymakers ultimately need to provide conditions that incentivise investment.
“That means taking action, as called for in our landmark publication The Framework for Growth, to reduce factors that hamper growth for business like high employment costs, corporate taxation and the burden of excessive regulation.
“The Autumn Budget a week ago was an opportunity to remove many of these barriers but what we got was some low-hanging fruit for business – some welcome incentives for founders and startups, and extended relief for hospitality and retail around business rates – but, while all helpful steps forward, we really need to see interventions that have a much greater impact on alleviating the immense pressure faced by business.
“The Chamber’s Framework for Growth outlines the specific areas policymakers should focus on to enable the East Midlands to thrive – reducing costs for business, reducing regulatory burden, prioritising skills investment and infrastructure improvement – areas we will continue to lobby policymakers for.”
View East Midlands Chamber’s Framework for Growth here.
View East Midlands Chamber’s Quarterly Economic Survey, Q3, 2026 here.
