Published by Zeb BhamThe British economy can only withstand a small rise in the base rate of interest, an expert has stated.Michael Baxter, editor of InvestmentandBusinessNews.co.uk, said he believes the economy could withstand an interest rate rise of up to half a percentage point.Any further rise could send the economy back into recession, he noted.He suggested that a move by the Bank of England Monetary Policy Committee to increase the base rate to one per cent would not lead to a recessionary environment, noting that the markets are expecting an increase at some point in the near future.However, Mr Baxter said that a larger increase may have a negative effect on growth."If the markets are right then interest rates could be up 2.5 per cent in a year or so. I think that would send us back into recession," Mr Baxter claimed.The Monetary Policy Committee last month voted to keep the base rate at its current record low of 0.5 per cent. Three members of the committee - Andrew Sentance, Spencer Dale and Martin Weale - voted for an increase.For more information on foreign exchange treasury services and risk management, visit our Corporate FX site