Small businesses across the North East are crying out for help amidst closures across the region.

In just the last month The Northern Echo has reported on more than 10 historic businesses in the region closing due to rising costs.

Despite Prime Minister Rishi Sunak’s recent statement on LBC radio that "businesses in Richmond are booming" there have been four closures announced in the last week.

A recent study carried out by the British Retail Consortium revealed that the North East has the highest high-street vacancy rate as closed shops are left empty.

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Yesterday (Thursday, August 3), the Bank of England raised interest rates for the 14th time in a row, to 5.25 per cent - and signalled that borrowing costs could stay high for a prolonged period of time to keep a lid on inflation.

Paul Harrison, chair of the Original Richmond Business and Tourism Association, described how punishing this new interest rise will be for small businesses.

He said: “The interest rises will affect people’s margins even more.

“The amount of disposable income people will have is being reduced again which will have a knock on impact on how much people will spend on the high-street.

“These negative effects are not just going to be felt in Richmond.

“People need to be more aware of the pressures small businesses are being put under.

“More needs to be done to help them survive.”

The Northern Echo has covered just some of the businesses which have made the difficult step of closing due to rising costs These include:

  • Ravensworth Nurseries in Richmond
  • Finbarr’s Restaurant in Durham
  • Cross View Tea Rooms in Richmond
  • Bernie’s Bakery in Spennymoor
  • The Fleece Hotel in Richmond

Peter Gibson, Darlington’s Conservative MP, explained that the rate rise will be a ‘concern’ to small businesses with borrowings.

He said: “The government remains 100 per cent committed to bringing inflation down which is the one sure fire way we can end up in a position in which people and businesses are better off.

“I appreciate that the interest rate rise will be of concern to those individuals and businesses who have borrowings.

“I remain committed to supporting independent businesses here in Darlington.”

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A spokesperson for the North East Chamber of Commerce said: "Businesses across the UK will be fervently hoping that today’s rise in interest rates is the last they will see.

"While many firms will have already factored this increase into their plans, it is clear from the recent rise in insolvencies that the economic environment is becoming stacked against smaller firms.

"They are the ones with less cash reserves in the bank and greater exposure to finance.

"Through our Quartley Economic Survey and regular discussions with members across the North East we know interest rates, along with inflation and tax are putting great pressure on businesses, impacting their cashflow and investment plans."

Ben Quaintrell, manager of estate agency group My Property, described how he hopes the economy will return to normal soon.

He said: “It’s not unexpected but I know many won’t welcome this latest hike in interest rates, which I believe won’t be repeated this year.

“With inflation already starting to fall, I’m optimistic the economy is starting to reset with a return to normality.”