Base rate plateau a concern for small businesses-Accountants in Wimbledon

In light of the Bank of England’s decision to keep the base rate at 5.25%, the Federation of Small Businesses (FSB) has raised concerns about the potential negative effects on small business growth and investment.

FSB National Chair Martin McTague shared his thoughts on the decision, stating, “Yet again, the MPC has opted to stick instead of twist, a move which was widely predicted but which is no less disappointing for it. The high plateau rates are currently stuck at is now undermining growth, as small firms struggle to access affordable finance to help them expand.”

McTague emphasized that even though inflation is now back on target, the absence of a rate cut could hamper the fragile signs of economic recovery. “Holding off a cut in the base rate until a future date risks snuffing out tentative signs of a recovery in GDP, with the flat growth in April a warning sign,” he noted.

Despite the recent higher-than-expected services inflation, McTague warned that the threat to growth must not be overlooked. Ignoring this could “have potentially devastating consequences for small businesses.”

The FSB remains hopeful that the Bank of England will soon reach a tipping point for a rate cut, which would give small firms the much-needed opportunity to invest and scale up their operations. McTague concluded, “Small firms will be hoping that the tipping point for a cut will be reached sooner rather than later, to help them invest and scale up.”

This sentiment is echoed widely among small business owners who are seeking more favourable financial conditions to drive their growth and sustainability. The need for accessible and affordable finance is crucial.

GET IN TOUCH WITH OUR WIMBLEDON ACCOUNTANTS to discuss your business finances in light of these developments. We are here to help you navigate these challenging times and find the best financial solutions for your business.

For more information, see: FSB Article.

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