Rate decision disappointing for small businesses

21 Jun 2024

The Bank of England's decision to hold interest rates was disappointing for small businesses, says the Federation of Small Businesses (FSB).

Interest rates have been held at 5.25% and remain at their highest level for 16 years.

The Bank of England had been widely expected to keep rates unchanged despite a further slowdown in inflation.

The bank's monetary policy committee (MPC) voted by a majority of seven to two to keep rates unchanged.

It is the seventh time in a row that interest rates have been left unchanged.

Martin McTague, National Chair at the FSB, said: 'Yet again, the MPC has opted to stick instead of twist, a move which was widely predicted but which is no less disappointing for it.

'The high plateau rates are currently stuck at is now undermining growth, as small firms struggle to access affordable finance to help them expand.

“Inflation is now back on target, and holding off a cut in the base rate until a future date risks snuffing out tentative signs of a recovery in GDP, with the flat growth in April a warning sign.

'Even with services inflation coming in higher than expected yesterday, the danger posed by stifling growth must not be ignored, as doing so will have potentially devastating consequences for small businesses.'