Third of Yorkshire firms will be hit by 0.5pc interest rate rise

A study from insurer QBE revealed one in five businesses in the region cite prospective rate increases as the primary concern for their business.

Almost half (48 per cent) of those surveyed said a rise of 1.5 per cent would put them under pressure.

The Bank of England base rate has remained at the historic low rate of 0.5 per cent since 2009.

Mark Carney issued forward guidance tying interest rate rises to unemployment levels on his appointment as BoE governor, but scrapped the policy months later.

A more complex set of factors based on spare capacity has now been adopted by the Bank, but recent economic volatility has thrown the timetable into doubt.

Andrew Aldridge, senior trade credit underwriter at QBE, said Yorkshire businesses showed “a marked sensitivity” towards even small increases in the base rate.

He said: “The closing of 2014 and the first days of 2015 have seen a number of high profile business failures and profit warnings.

“Further weakening of the UK’s major trading partner, the Eurozone, coupled with downgrades of our own economic growth forecasts, demonstrate the continued fragility of the recovery.”

Interest rate rises could leave businesses starved of cash, he added.