The British Chambers of Commerce (BCC) has called for caution over a potential rising of interest rates.
Members of the BCC warned the Bank of England not to make any "hasty decisions" as it could impact on the growth ambitions of companies across the country. The business group explained that results from a survey of 7,000 companies showed that the growth had slowed between April and June and that a rising of interest rates could further hinder any future opportunities for improved operations.
Sectors such as manufacturing have eased following a surge earlier in the year and this has seen a drop in the all-time highs in the first quarter. Manufacturers have failed to hit the peaks they were recorded earlier in the year and while they are still above pre-recession levels in 2007 there has been a drop in exports and investment growth.
In June, the Bank of England's nine-members monetary policy committee (MPC) voted unanimously to keep interest rates at 0.5 per cent but the Guardian reported that two members were adopting a "wait-and-see" approach to borrowing costs. The minutes of the MPC meeting suggested that some members thought the policy decision had become "more balanced", the vote remained at 9-0 to keep rate unchanged.
The BCC is now urging the Bank of England to err on the side of caution when assessing the options around interest rates. Members said that recovery was a major priority and that there was a need to repair "our broken business finance system".
John Longworth, director general of the BCC, said: "By driving up the cost of credit for fast-growing firms, many of whom do not sit on the same healthy cash piles as their more established counterparts, early rate rises may mean more limited growth ambitions among the very firms we are counting on to drive the recovery."
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