Ahead of the upcoming decision by the Bank of England’s MPC as to whether to once again increase interest rates, the Institute of Directors has today published data showing that the vast majority of business leaders (83%) are currently more concerned about the impact of inflation rather than interest rates (11%) on the overall business environment.

Commenting on the findings, Kitty Ussher, Chief Economist at the Institute of Directors, said:

“In the last fortnight, business leaders have experienced skyrocketing uncertainty, devoting considerable bandwidth to understanding what this grim news from Ukraine means for their own assumptions and organisations. In that context, the Bank of England has some deep thinking to do about the extent to which this uncertainty itself will reduce demand in the economy even before the direct economic impacts of sanctions and trade disruption are felt.

“However, one thing is clear: inflation itself is a very real and present concern to business leaders. Our data shows that when forced to choose, our members are more worried about inflation than rising interest rates. Therefore, because a decision by the Bank of England to raise interest rates would demonstrate its determination to tackle inflation, which itself plays a part in bringing expectations of future inflation down, the Institute of Directors is hoping for a further rate rise on Thursday.”