Rate Cut Will Help Firms in Choppy Waters

Chamber Chief Executive Dr Ian Kelly

“BUSINESSES will welcome the decision to cut the base rate to 4%, marking a further move away from a prolonged period of elevated borrowing costs. With signs that the labour market is beginning to loosen and unemployment edging upwards, the Bank is right to act to mitigate the risk of a deeper downturn. 

“SMEs in particular have been under sustained pressure from cumulative cost increases and external shocks.  The impact of April’s national insurance rise is now tangible, with firms reporting reduced investment and recruitment plans. As today’s report by the Bank highlights, our Q2 survey showed 56% of firms citing tax as bigger concern than earlier in the year. Ongoing global disruptions have compounded the unpredictability. 

“Rate cuts alone are only part of the solution. To restore business confidence, firms will need to see a roadmap to lower their cost burden, further improvements to ease trade friction, and greater investment in AI and infrastructure.” 

Dr Ian Kelly, Chamber Chief Executive remarked:

“We welcome this decision. As a Chamber we remain very concerned by the cumulative impact being built up on particularly smaller business. In these turbulent times this rate cut is very timely.”