After keeping the interest rate at 0.5 per cent in July, the Bank of England has decided to cut the current interest rate to 0.25 per cent. The cut helps to achieve one of the Bank’s primary objectives to allow cheaper borrowing for businesses and in the process, enhance more opportunities for investment by firms. Mortgage owners will also be pleased with the cut however, the change may also have its downfalls.
Commenting on the Bank of England’s decision, Howard Graham, CEO of start-up specialist Made Simple Group, said:
“This is welcome news for small businesses and start-ups, who will benefit from cheaper borrowing – vital when you consider that sourcing finance is one of the first hurdles when setting up a new company. Small enterprises, especially those employing just nine people or less, are cornerstones of our economy, accounting for 95 per cent of total UK business and a third of the sector’s employment, yet barriers like funding can act as a deterrent for those just starting out.
“For these companies, the ability to borrow at a lower rate could make a huge difference to their prospects over the next few months. In turn, this could be a shot in the arm for the economy.”