Holding the base rate at 3.75%, the Bank of England reported that inflation has dipped slightly to 2.6% in the period leading up to June, but it is expected to rise again later in the year due to the volatility caused by the conflict in Iran.

UK economic growth is also forecast to reach 1.1%, a marginal increase on previous predictions.

Respondoing to the news, Paul Cherpeau, chief executive of Liverpool Chamber, said: 

“What today’s announcement confirms is the insipid impact of global uncertainty on the intentions and capabilities of businesses here in the Liverpool City Region and the wider country. 

“Interest rates may have been held, but the voting pattern of the committee suggests it may rise again in future, while inflation has fallen but again it seems a temporary respite rather than a long-term trend. 

“We know from speaking to our members that this unpredictability, combined with the energy price shock and the rising employment costs, is holding them and their clients back from making important decisions around investment or hiring staff. 

“Clearly, the Bank and the government cannot dictate the outcomes of geopolitical issues, but many of the cost pressures facing businesses are a result of domestic policy. So, while we must hope for a calmer period overseas, businesses will also be looking to the government to help create a more stable, growth-focussed environment at home and take decisive action to reduce the cost of doing business.”  

In the latest Quarterly Economic Survey by British Chambers of Commerce, a business based in the Liverpool City Region said: 

“The Iran war has had a huge impact on business confidence and our customers are postponing investments that they had planned to make. It has been the hardest quarter for us since the financial crash of 2008.” 

Another LCR-based firm commented: 

“The economic shock caused by the Gulf conflict is causing customer projects to be delayed.”