Rate Respite for Businesses after Tough Budget
07 Nov 2024
Published in: British Chambers of Commerce News
The British Chambers of Commerce responds to the latest BoE interest rate decision.
Responding to the latest interest rate decision by the Bank of England, David Bharier, Head of Research at the British Chambers of Commerce said:
“As businesses continue to digest the difficult implications of last week’s Budget, a further interest rate cut is some good news for firms. “The cost of borrowing remains a major barrier to investment. Our research shows less than a quarter of companies boosted investment in Q3. The economy will continue to struggle until this changes.
“The continued easing of inflation is likely to translate into further gradual rate cuts. However, there could be some bumps on the way. Services inflation remains stubborn, and major global conflicts continue to bring uncertainty. A decisive Trump presidential victory has powered US stocks to all-time highs, but a policy of tariffs could be inflationary.
“We’re expecting to see a number of long-term plans from the UK Government early next year covering infrastructure, investment and trade. It’s critical that these plans are outlined and delivered at pace, to give business the opportunity to help drive growth.”
Gemma Edwards, Black Country Chamber of Commerce Policy & Impact Officer commented:
“This is a ray of light for businesses, meaning lower borrowing costs, and we hope this leads to a rise in confidence for businesses to go ahead with their investment plans, given that borrowing costs are a big barrier to firms investing.
"However businesses should retain a note of caution given the possible impact of a Trump tariff policy coming into force in the next twelve months, as well as the impact of changes from the Government to employment rights, and the ongoing geopolitical instability.”
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