Interest rates rise ‘another barrier on business growth in Wales,’ says businesses leaders
The Bank of England’s largest hike in interest rates in more than 13 years will create “yet another barrier on small business growth aspirations,” the Federation of Small Businesses (FSB) Wales has said.
Yesterday, September 22, The Bank of England’s Monetary Policy Committee (MPC) decided to raise rates to 2.25% – their highest since November 2008 – from 1.75%, in an effort to grapple big increases in the cost of living.
The Bank of England has indicated it believes the economy is already in recession.
“The latest inflation figures spell yet another barrier on small business growth aspirations,” Federation of Small Businesses (FSB) Wales Policy Chair Ben Francis said.
“The increased pressure the Bank of England announcement places on small businesses cannot be ignored. Our figures show that small businesses’ perception of credit availability and affordability is firmly in negative territory and decreased between the first and second quarters.
“The welcome announcement of the energy support for businesses went some way to ease the short-term pressure many small firms are facing, but the long-term reality for small firms remains uncertain.
“This is especially true for the firms who agreed to new or renewed contracts before the 1 April cut-off at a much higher price than they were previously paying, and for those who signed up after that date but who have been facing half a year’s-worth of vastly costlier energy prices.
“The Prime Minister’s government is calling the mini-fiscal event [today] a growth plan. If it will indeed stimulate growth against the backdrop of significant challenges, it is vital that the Chancellor makes a strong statement in support of small businesses and self-employed people.
“Among the measures FSB would welcome, include the reversal of the NICs increase, and a cut to fuel duty.
“Looking to a Welsh Government response, we are calling for an overhaul of business rates, which would make a real difference to everyday small businesses.”
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