The latest rise in interest rates is ‘another blow for many hard-pressed businesses’.

That’s the view of Ian Girling, chief executive of Dorset Chamber, as the Bank of England raised interest rates for the 12th time in a row.

The Bank said UK inflation is expected to fall slower than previously thought as food prices remain stubbornly high. Seven members of the Bank’s Monetary Policy Committee (MPC) voted to increase the base interest rate to 4.5 per cent from 4.25 per cent.

Mr Girling said of the rise: “While not unexpected, it will be disappointing for those businesses in Dorset most exposed to borrowing costs, cash flow pressures and consumer discretionary spend.

“Inflation rates have remained at stubbornly high levels despite 12 consecutive increases in the interest rate, which is now at its highest level since 2008.

“The combination of high interest rates and high inflation means the worst of both worlds for many firms as operating and borrowing costs both go up.

“The government should consider further action to break this vicious cycle by addressing supply side issues and measures to boost economic growth, such as through investment in infrastructure, skills training, and global trade.”