New fears of rising interest rates have arisen as British businesses enjoy its greatest boom in over a decade. A number of record highs have been achieved including price expectations of both manufacturers and service companies, business confidence – at its highest since 1994 and capacity utilisation – at its highest since 1996.
The Bank of England has pointed out that the reduced spare capacity has been a driving force behind the 0.25 increase to 5.25% in interest rates. Also with the release of inflation figures for December, Mervyn King, the governor of the Bank, may be required to write a letter to the chancellor explaining why CPI measures exceeded the targeted measured of 3%.
The trend of rises in sales, orders and prices from the second half of last year is set to continue according to Business in Britain survey carried out by Lloyds TSB Corporate Markets.