HUDDERSFIELD firms have urged caution over further interest rate rises following this week's 0.25% increase.
The Bank of England's monetary policy committee yesterday increased the base lending rate to 5.5%, hitting homebuyers and business borrowers.
The move followed news that the inflation rate hit 3.1% in March.
The latest interest rate rise takes the base lending rate to a six year-high.
The rate rise is likely to add about £16 a month to the bill for an average £100,000 mortgage.
Steven Leigh, senior policy adviser for the Huddersfield-based Mid Yorkshire Chamber of Commerce, said the increase was inevitable after the rise in inflation. But he said any further increase could hit business confidence.
He added: "There is usually a bit of a delay before we see the effects of an increase in the lending rate."
A Lloyds TSB spokesman also said the news that inflation was more than 1% beyond its target had made the rate rise inevitable.
But he said: "Our view is that interest rates have now reached their peak. Another rise would only be justified if inflation continues to drift further beyond target."
Ron McMillan, northern chairman of accountancy firm PricewaterhouseCoopers, said: "A further rise in the base rate must not be a foregone conclusion.
"We would urge the Bank of England to allow some time for the impact of this change to filter through before any additional increases are made."
Andrew Palmer, deputy regional director for employers' body the CBI, said the increase was widely expected, but added: "While we fully accept the need for this rate rise, we see no reason for a further increase at present."
A spokesman for the TUC said: "Hardworking home owners and business people will hope the Bank will give the increase enough time to take effect before deciding whether to put up rates again.
"As mortgage payments rise people will worry about how far the family budget is going to stretch."