Bradford's business community is discouraging the Bank of England from any further hikes in interest rates following the news that inflation is running at an 11-year high.

Rises in inflation were widely forecast following last week's shock rise in interest rates.

But the official figure for December showed inflation to be running at three per cent, higher than expected. It is the eighth consecutive month that inflation has risen.

Now analysts fear further hikes in interest rates in the coming weeks.

Richard Wightman, Bradford Chamber president, said: "It is disappointing and we will continue to lobby against any further rate rises despite this latest news.

"We believe that, due to more stable energy prices lately, and the Monetary Policy Committee's own expectations that inflation will fall later in the year, there is a strong case for stability and consistency for a sustained period and, at the earliest opportunity, even a reversal of the recent rate rises.

"Oil prices are falling and other consumer products remain fairly stable. If pressure to raise wages by unreasonable amounts can be resisted, then business confidence can be restored and the economy put back on track."

Andrew Palmer, CBI deputy regional director for Yorkshire, said: "December's inflation number is stronger than either we or the markets had expected.

"This could give an unhelpful signal to the 2007 wage round.

"We must hope that this does not lead to further wage increases, otherwise this will push the peak in interest rates higher still."

  • Start or join a debate on this issue in our online forum - Click here