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Tough Year Ahead As Interest Rate Stays High

Reacting to the latest Bank of England interest rate decision, David Bharier, Head of Research at the British Chambers of Commerce, said:

“While a cut in the interest rate could have provided some relief for firms ahead of Christmas, today’s decision to hold it at 5.25% was expected and allays fears of further rises.

“UK businesses have been faced with the twin shock of an inflation crisis and increased borrowing costs. Around half of the businesses we survey report a direct negative impact from the current interest rate, while only around one in ten see a benefit.

“The BCC’s latest Economic Forecast expects only a 0.25% point cut in the interest rate for the whole of 2024, although businesses need to be prepared for any unexpected changes given the uncertain policy landscape.

“SMEs have been operating in an uncertain climate for too long, with policies constantly chopping and changing over the past few years. They need to see clear direction from decision makers, creating a roadmap for business that boosts confidence and investment.”