Responding to the latest interest rate decision from the Bank of England, David Bharier, Head of Research at the British Chambers of Commerce said:

“Holding the interest rate at 3.75% was expected as the Bank grapples with the twin challenges of domestic cost pressures and an unpredictable global outlook.

“Our data show that a majority of firms still expect to raise their prices, with labour costs cited as the top cost pressure. Meanwhile, tariff threats are already prompting contingency planning and risk pushing prices higher if retaliation follows.

“That leaves the Bank facing a difficult trade-off. Businesses tell us inflation risks are likely to persist in the short term, but a lower interest rate will be a key part of kickstarting the economy. However, today’s more optimistic MPC forecast, predicting inflation returning to target by April, will be welcomed by the firms we represent.

“For businesses across the UK, greater policy certainty and a clear path to lower borrowing costs are essential to unlock investment, boost productivity and transform trade.”