Further rate cuts crucial to support growth, says BCC

06 Feb 2026

More cuts to interest rates will be needed to support economic growth, says the British Chamber of Commerce (BCC).

The Bank of England has held interest rates at 3.75% in the latest decision on 5 February.

The Monetary Policy Committee (MPC) made its decision in a knife-edge vote, by five votes to four, to hold interest rates.

Four of the Bank of England's nine-member committee voted for a quarter point cut which would have taken borrowing costs down to 3.5%.

David Bharier, Head of Research at the BCC, said the decision was expected as the Bank continues to 'grapples with the twin challenges of domestic cost pressures and an unpredictable global outlook'. 

He added: '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, the 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.'