Shropshire Chamber of Commerce responds to interest rates decision
The Bank of England’s decision to cut interest rates for the first time in more than four years will give ‘welcome breathing space’ to local businesses, according to Shropshire Chamber of Commerce.
Chief executive Ruth Ross said it was now imperative that today’s 0.25% reduction, taking the base rate down to 5%, was passed on ‘fully and quickly’ by financial institutions and lenders.
“We know that Shropshire businesses thrive and invest when they have stability and confidence. Reduced borrowing costs are a vital element of this.
“Although today’s reduction was widely expected with inflation having settled back close to its target 2% figure, this will still have come as welcome relief to many businesses, particularly small firms looking to invest.”
In its latest quarterly economic survey, Shropshire Chamber found that the number of companies viewing inflation as a key fear factor fell by 13% on the previous quarter.
It also showed that tightening cashflow is having an impact on investment in plant and machinery, which was down by 15%.
David Bharier, head of research at the British Chambers of Commerce, added: “Our economic forecast expected this cut, as well as a further reduction by December, bringing the interest rate to 4.75% by the end of the year.
“The Bank will be monitoring events closely as global conflicts and trade tensions could still exert price pressures on commodities and the finely balanced 5-4 voting split shows this caution.
“For UK SMEs, our research shows that inflation remains a top issue for them, albeit down on the peak of concern in 2022.
“As the Chancellor begins to prepare her Autumn budget, we want to work in partnership with government to unlock the investment needed to boost economic growth.”
