Douglas Grant, group chief executive officer at Manx Financial Group PLC, which includes Conister Bank, has given his views on the biggest Bank of England interest rate hike for 33 years.

He said: ‘Another rise in UK interest rates today is unavoidable.

‘It continues to hit levels not seen for decades as inflation keeps on soaring, exacerbating the cost of living crisis. We believe that demand for working capital is set to climb to unprecedented levels as more businesses desperately require liquidity provisions to counteract rising interest rates, supply chain issues, increases in wages and record energy price hikes.

‘With the cost of borrowing set to increase, many SMEs are struggling and will continue to be challenged this year.

‘The government’s emergency intervention on energy costs for SMEs is great news for UK business and shows that it is taking urgent warnings from a variety of organisations seriously. We do however believe that more needs to be done.

‘Our research recently revealed that 22% of UK SMEs that needed external finance and/or capital over the last couple of years, were unable to access it.

‘Indeed more than a quarter have had to stop or pause an area of their business because of a lack of finance. SMEs continue to struggle with accessing finance and, worryingly, this lack of availability is costing them and the UK economy in terms of growth at a time when it is needed the most.

‘The amount of growth that is being sacrificed is significant and will require new solutions which are designed to address this funding gap.

‘The extension of Recovery Loan Scheme (RLS Phase 3) was encouraging for UK business. RLS, which Conister was accredited for in August last year, has provided the necessary catalyst that many sectors required to thrive.

‘As demand for working capital soars to new highs, more businesses desperately require liquidity provisions to counteract record inflation levels, rising interest rates, supply chain issues and increases in wages. With the cost of borrowing set to increase, many SMEs are facing their own cost of living crisis.

‘For some time we have been calling for a sector focused, permanent government-backed loan scheme which brings together both traditional and alternative lenders to guarantee the future of our SMEs.

‘As the government looks for other ways to power the economy’s resurgence, the importance of a permanent scheme cannot be overstated. It could act as the fundamental difference between make or break for many companies, and in turn, our economy. We very much hope this is something that becomes a reality.’