Welsh business anxiety over the prospect of an interest rate hike is increasing, according to new research from Lloyds Bank Commercial Banking.

The bank’s latest Business in Britain report found the net balance of firms expecting interest rates to increase before June has fallen from 42 per cent six months ago, to 37 per cent.

However, the number of companies that said that they were ‘very concerned’ about a rise in interest rates has almost quadrupled in the same period, from 6 to 22 per cent.

Despite this, the proportion of firms expecting to take new or additional steps to protect their business against interest rate rises in the next six months has fallen, from 30 per cent to 19 per cent.

Britain's interest rates have been at a record low of 0.5 per cent since March, 2009.

Allan Griffiths, area director for SME Banking in Wales and the Borders, Lloyds Bank Commercial Banking, said: “Despite expectations of higher interest rates falling, our research has found that Welsh businesses are still very concerned about a possible increase.

“While the Fed has already made the move to increase its interest rates, the MPC will want to be confident that the UK economy is ready for a gradual rise in rates sometime this year.”

The Business in Britain report, now in its 24th year, gathers the views of 1,500 UK companies, predominantly SMEs, on a range of important performance and confidence measures.