Inflation rise is further setback, says chamber
An increase in inflation to 4.5 per cent will "more than likely" result in a rise in interest rates, according to the Birmingham Chamber of Commerce.
The Bank of England said it expected inflation to remain between 4 per cent and 5 per cent this year, well above the Monetary Policy Committee’s 2 per cent target.
The Birmingham chamber said any rise would slow the pace of recovery in the West Midlands even further.
Christine Braddock, president of Birmingham Chamber of Commerce Group, said: "The business community is suffering. It is likely that interest rates will begin to move up to 1 per cent by the end of 2011, 2 per cent by the end of 2012 and 3 per cent by the end of 2013."
Mike Ashton, spokesman for the West Midlands Chambers of Commerce, added: "Raising interest rates at a time when fiscal policy is being tightened will heighten the pressures facing businesses even more."
