Pictured above: Christine Braddock

West Midlands businesses say today's increase in inflation to 4.5 per cent will now more than likely result in a rise in interest rates. 

This brings with it further challenges and while overall business conditions remain generally positive, the pace of recovery in the West Midlands has slowed.

The Bank of England expects inflation to remain between 4 per cent and 5 per cent this year, well above the Monetary Policy Committee's 2 per cent target.  

The raft of employment legislation has started and will further contribute to the uphill fight businesses are experiencing in the current economic climate.

Christine Braddock, president of Birmingham Chamber of Commerce Group said: "The business community is suffering.  It is likely that interest rates will begin to move up to 1 per cent by the end of 2011, 2 per cent by the end of 2012 and 3 per cent by the end of 2013." 

Mike Ashton, spokesman for the West Midlands Chambers of Commerce said: "Raising interest rates at a time when fiscal policy is being tightened will heighten the pressures facing businesses even more."