Corin Crane, the Chief Executive of the Coventry and Warwickshire Chamber of Commerce, said the decision spelled bad news for SMEs who were battling a host of issues at the moment. 

He said: “This latest rise had been forecast but owners of small businesses would have been desperately hoping it didn’t become a reality. 

“The Bank of England needs to keep a watchful eye on inflation – we all appreciate that – but small businesses are battling to keep their businesses afloat never mind move forward, and this decision will continue to affect their day-to-day costs. 

“It leads to continued uncertainty when businesses are dealing with rising energy bills, global supply chain problems, recruitment and skills issues, a flat economy and inflation - which is not a cocktail to help businesses expand. 

“Businesses desperately need policies that drive growth and reduce costs and the continuous, month by month rise in interest rates is becoming an incredibly blunt instrument to battle inflation that does little to help our local economy. 

“The Coventry and Warwickshire Chamber is here to help businesses whatever their circumstances so please get in touch with our experienced team of advisers.” 

Vicky Pryce, BCC Economic Advisory Council member, said: “Businesses across the UK will be fervently hoping that today’s rise in interest rates is the last they will see. 

“While many firms will have already factored this increase into their plans, it is clear from the recent rise in insolvencies that the economic environment is becoming stacked against smaller firms. They are the ones with less cash reserves in the bank and greater exposure to finance. 

“Yet data from the Office for National Statistics clearly shows that input cost pressures for firms are finally falling. And recent BCC research backs this up with 45% of companies now expecting to increase prices, a 15-percentage point fall compared to six months ago. 

“We are also likely to see a further substantial fall in inflation in July as last year’s energy price rises drop out of the data. 

“While inflation remains the top concern for businesses overall, interest rates have emerged as the second top concern, with 41% citing this as more of a worry than three months ago in the BCC’s latest survey. 

“And there is now a real danger that the economy could be pushed into recession as it takes 18 months for changes in interest rate rises to filter through. With all the cumulative pressure of past rises yet to come, business will be watching closely for any further indications on the Bank’s plans. 

“At the same time, it is encouraging that the Government has recently expanded the list of shortage occupations to recruit more workers from abroad. Hopefully it will now be considering what more can be done to ease staff pressures.” 

Pictured: Corin Crane, Chief Executive of the Coventry and Warwickshire Chamber of Commerce