Difficulties accessing cash are halting expansion plans for many businesses, stifling innovation and international collaboration for a large portion of the business economy.

Richard Austin, Partner at BDO, commented: “Despite staying resilient through an incredible difficult time, tough challenges remain for mid-sized businesses, with access to capital becoming a critical issue.”

The news comes amidst rising inflation across the UK standing at 8.7% in May, while the Bank of England increased their interest rates to 5% last week, the highest since 2008.

Responding to the findings, Steven Mooney, CEO, FundMyPitch, said: “Access to funding is vital for the budding entrepreneurs and startups that are set to play a crucial role in the UK economy through innovation, job creation and growth. Yet challenges remain for startups and SMEs in the face of interest rates and, in a rocky economic climate, raising capital and accessing cash is harder than ever. Businesses need to unlock new options for fundraising, not just from banks but through greater access to venture capital networks and other investors by showcasing their businesses to those positioned to propel the economy.”

The Bank of England and other financial authorities have warned that the fight against surging inflation is ongoing as they battle rising interest rates and borrowing costs.

The Bank for International Settlements (BIS) recently released a statement claiming that inflation fears may continue if financial authorities ease off prematurely. According to the report, policy rates may need to stay high in order for inflation to decline and remain low.