Ross Boyd, Director at RB+ Chartered Accountants, commenting on the announcement of the interest rate increase, said: “This 0.25 per cent rate increase to 1 percent seems unlikely to have any real impact on inflation as it is being driven by global factors, such as lockdowns in China, the war in Ukraine and increased trading costs. It’s currently unclear what Bank of England can really do to alleviate these inflationary pressures.

“There will be an impact on local businesses in terms of increased loan repayments for those with debt linked to base rate as well as a reduction in discretionary spend by homeowners, on things like hospitality and leisure.

“HMRC are going to increase interest rates on late payments following the Bank of England’s increase. For those already struggling to pay HMRC, this will only get worse.

“Local businesses are going to feel a double whammy due to the hike in National insurance. Employers should look at alternatives such as salary sacrifice to remunerate staff or at different operating models. Further tax increases for businesses are scheduled for 2023 and we could well see a contraction in the economy, or even a recession.

“The biggest impact for local business will still be inflation, the increase in interest is still not at levels previously seen. One positive point for businesses and personal savers is that if they have savings, they will benefit from the higher interest rate as it will offset some of the cost of inflation.”