The number of British firms raising their prices is growing at the fastest rate for 10 years, according to the British Chamber of Commerce (BCC).

Domestic sales of goods and services surged ahead between October and December last year and this was enough to encourage companies to put up prices as an added measure to stimulate saving and investment in the commercial sector.

The BCC’s figures also give credence to the growing suspicion amongst economists that inflation is once more becoming an ominous element in the domestic economy.

The Monetary Policy Committee (MPC) at the Bank of England certainly thinks so and recently raised interest rates to 5.25% to ease inflationary pressure.

However, the BCC urged the MPC not to raise rates again in the foreseeable future as this would would harm the growth and UK investment prospects of the companies it represents.

However, despite robust domestic growth, manufacturing balances for exports witnessed “sharp and disturbing falls”, the BCC said in its quarterly survey, and these were undermining domestic progress.

David Kern, economic adviser to the BCC, was quoted as saying that holding rates steady would help business. “Even if one accepts that last week’s shock increase in interest rates was necessary, it is vitally necessary to avoid monetary overkill.

“We urge the MPC to make monetary policy boring again. Shock tactics are unwelcome and potentially harmful. British business requires a stable and predictable interest rate environment.”