05 May 2022
The British Independent Retailers Association (Bira) has said the news that interest rates are rising to 1% was "inevitable yet not surprising".
In figures released today by the Bank of England, rates have risen to the highest level since 2009 as it tried to stem the pace of rising prices.
Rates have risen to 1% from 0.75% since December, and inflation is already rising at its fastest in 30 years and is expected to breach 10% by the end of the year.
Warnings are also in place that the UK economy is set to shrink next year.
In response to this news, Bira's CEO Andrew Goodacre said: "This latest increase to 1% seemed inevitable and we are not surprised to see revised forecasts expecting 10% inflation by the end of the year.
"Since last summer we have been warning of double-digit supply chain inflation that would result in higher prices. However, retailers are doing all they can to limit the price increases as they recognise that the shoppers have less money to spend.
"Whilst we hope this latest increase reduces inflation, we worry that it will further damage consumer confidence and reduce expenditure. Furthermore, we are concerned about the rising cost of debt payments as a result of interest rate rises as many more independent retailers have increased levels of debt due to Covid.
We feel that government needs to review the options for paying back the bounce back loans and offer more flexibility to the businesses dealing with a tsunami of cost increases," he said.
Independent Retailers are not excluded from the cost of living crisis, and we’d like to know your thoughts on this story, as well as what you’d like to see done to aid with the cost of running a business. Please send your thoughts to andrew.goodacre@bira.co.uk
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