Bodies representing both employers and workers have criticised this week's decision to the Bank of England to raise interest rates for only the second time in a decade.
The quarter point rise will take interest rates from 0.5 percent to 0.75 percent – the highest level since March 2009.
The Bank of England's governor, Mark Carney, said there would be further "gradual" and "limited" rate rises to come.
The decision was described as "ill-judged" by the British Chambers of Commerce. Suren Thiru, head of economics at the BCC said: “The decision to raise interest rates, while expected, looks ill-judged against a backdrop of a sluggish economy.
"While a quarter point rise may have a limited long-term financial impact on most businesses, it risks undermining confidence at a time of significant political and economic uncertainty.
“The increase reinforces a concerning aspect of the Bank of England’s recent approach to monetary policy, which appears to be overly focused on reinforcing an idealised direction for rates, rather than on economic reality – an approach that unnecessarily risks UK’s growth prospects.
"The central bank’s assumption that the economy’s speed limit has slowed is unduly pessimistic, as sustained action to fix the fundamentals at home, from closing the skills gap to greater infrastructure investment, would materially help lift the UK’s growth potential.
“The MPC must carefully consider what happens next. The most preferential option would be for a sustained period of monetary stability amid the current economic and political uncertainty.”
The Institute of Directors said the Bank fo England had "jumped the gun".
The IoD's senior economist, Tej Parikh, said: "The rise threatens to dampen consumer and business confidence at an already fragile time.
“Growth has remained subdued, and the recent partial rebound is the least that could be expected after the lack of progress in the year’s first quarter. At present it’s unclear just how sustained any rises in pay will be, and even if we are to see strong wage growth, the impact on inflation could be limited by the need for consumers to meet borrowing costs.
“Undoubtedly, Brexit remains a crucial factor, affecting directors’ investment decisions, while sterling is sensitive to the back-and-forth of the negotiation process.
"The MPC would have done well to hold off until its November meeting, allowing it to account for the October’s all-important Brexit deadlines, and get a firmer grasp on the broader trend in wage increases. But in reality, the Bank had tied its hands with recent communications, and the rate hike will come as little surprise.”
The Federation of Small Businesses said the increase would make new credit "unaffordable" for small businesses.
FSB research suggested 42 percent of small firms described new credit as ‘unaffordable’ in Q3 2018, with less than a quarter saying the opposite. Less than a third of businesses were being offered interest rates of below four percent, and one in three were being offered interest rates of seven percent or more.
"With borrowing costs for small firms already high, it’s critical that any future rate rises are carefully considered and gradual, said FSB national chairman Mike Cherry.
“We need to see a fundamental shift in the UK’s small business finance culture. Too many firms are reluctant to borrow and realise their full growth potential. Those that do are too reliant on traditional debt products.
“We could learn a thing or two from the US where equity finance is booming. UK firms need to be encouraged to recognise that this kind of investment can bring not only growth finance, but also advice and support from those with real expertise.”
The Trades Union Congress, meanwhile, said the increase was "a bad decision for working people."
TUC general secretary Frances O’Grady said: "With wage growth slowing down we need action to boost the economy, not rein it in.
“The government must now step up and take more responsibility with a plan designed to boost wages and create better quality jobs. It should include the creation of a National Investment Bank with a remit to target communities where good jobs are harder to find.”
The Confederation of British Industry said the decision was "in line with our expectations".
Principal economist Alpesh Paleja said: "The case for another rate rise has been building, with inflationary pressures being stoked by a tight labour market and many indicators now suggesting that weak activity in the first quarter of 2018 was a blip.
“The Monetary Policy Committee has signalled further rate rises over the next few years, if the economy evolves as they expect.
"These are likely to be very slow and limited, particularly over the next year as uncertainty around Brexit takes its toll on business investment.”