Previous rate hikes ‘have hit customer spending’published at 14:19 Greenwich Mean Time 1 February
Raphael Sheridan
BBC Cost of living producer
Stephen Russell is managing director of Copper Rivet Distillery
in Chatham, Kent, which opened a restaurant after the Covid pandemic.
In January he told the BBC that while inflation was coming down, the prices weren’t.
Because of this, he saw his profits take a hit – even though his sales were actually
going up.
“It’s very tricky to plan investment, plan your business, when
your cost basis is going up,” he said.
A higher base rate, he said, along with higher borrowing costs and bills, had made it hard for some customers to justify shilling out on “fun” purchases.
“They’ve got other things to think about, paying the gas
bills, paying the electricity, paying the mortgage or rent.”
While the base rate was held on Thursday, some of the impact of previous rises has yet to filter through to consumers.
These previous interest rate hikes also meant businesses like Russell’s had to cut back on
investment, and Russel said he would find it “hard to sustain” further rises in other costs like his wage bill.