Further interest rate hikes will damage small businesses Experts warn that further interest rate hikes will damage small businesses by stopping them from investing. The Bank of England recently increased the base rate from 4.25% to 4.5% in an attempt to reduce inflation, and economists predict another 0.25% interest rate rise next month. However, the Federation of Small Businesses warns that further hikes will leave small firms struggling to pay back loans and access credit, curtailing their ability to invest and grow. Chairman Martin McTague said, "We cannot end up in a situation where the cure is adding to the harms caused by the disease."