The Bank of England’s decision to cut interest rates is a positive move that will “encourage consumers to spend”, says UKHospitality.
The 0.25% interest rate cut from 5.25% to 5% is the first in over four years, since March 2020, and is the first change in the rate since August 2023.
Responding, Allen Simpson, deputy chief executive of UKHospitality, said: “I hope this will provide some relief for businesses that are continuing to pay back Covid loans, and encourage consumers to spend.
“Now is the time to press the accelerator on growth. We need to see interest rates continue to fall, and for the Government to urgently implement its promised reforms to business rates. Combined, this will see a meaningful and much-needed boost for hospitality businesses.”
The national chair of The Federation of Small Businesses, Martin McTague, also welcomed the cuts as a first step towards a better lending environment. He commented: “This rate cut was desperately needed, and small firms will give it a warm welcome as a harbinger of more cuts yet to come.
“The base rate’s previous high plateau placed huge pressure on small firms, adding to a difficult operating environment which has been making it far too hard for small firms to grow. Today’s cut will not reverse or immediately stem the financial pain, but it signals that – finally – things are moving in the right direction.
“Small firms have been telling us for some time that it is hard for them to access affordable finance, an issue which is a significant barrier to growth – every finance application that is denied, or every loan request that isn’t submitted in the first place due to high interest rates or pessimism about the state of the lending market means a missed opportunity for investment and expansion.”
