Business

'Higher interest rates will increase the cost of doing business'

Colin Neill, chief executive of Hospitality Ulster.
Colin Neill, chief executive of Hospitality Ulster. Colin Neill, chief executive of Hospitality Ulster.

BUSINESSES in the north have responded with dismay at the latest hike in interest rates.

The Bank’s Monetary Policy Committee voted 7-2 for a half point increase on Thursday as it stepped up its efforts to bring inflation down to around to its target of 2 per cent.

The Federation of Small Businesses (FSB) had urged the Bank of England to “show moderation” in its response to inflation.

The group’s policy chair of the in the north, Alan Lowry, said higher interest rates will increase the cost of doing business.

"The cost of borrowing has rocketed and will stunt the potential for expansion and growth. “A jump in already high interest rates will inflict more pain on already struggling businesses in Northern Ireland,” he said.

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Hospitality Ulster chief executive Colin Neill, said while interest rates remains the Bank of England's only tool to address inflation, the successive hikes in 2023 take the economy closer to recession.

"To the layman, it feels like this is deliberately intended to cause business failures, job losses and drive down demands for increased wages.

"Attempting to control inflation through fear of losing your job or causing business failures seems like a very cruel and unfair fiscal policy," he said.

“It is no secret that the impact of high food costs is hurting both the consumer and businesses within the hospitality sector as they both struggle to make ends meet.

“Profitability on food within our sector is now at rock bottom and without change will drive businesses to the wall.”