At midday today, the Bank of England kept rates on hold. We asked small business owners around the UK for their views.
10 responses from the Newspage community
“Whilst this will be welcome news to many small businesses, it's really quite extraordinary that, with inflation expected to peak at 5% next year, the MPC doesn't feel it can yet afford to increase rates from 0.1% to 0.25%. Such anguish over seemingly tiny margins suggests that sluggish growth is still the main concern.”
"A rate rise by the Bank would have a devastating effect for both small businesses and the property market, so this was the right decision. With businesses and investors barely recovered from the pandemic, adding to the cost of borrowing now could derail the recovery. Small business owners are seeing strong demand for goods and services, with many seeking finance to meet this demand. Increasing the cost of borrowing now is too soon, with uncertainty on the rise as we head into the winter."
"With the Bank of England voting to keep interest rates at the current historically low level , this will alleviate some of the fear in the UK property market. However, mortgage borrowers may not benefit as many mortgage lenders are likely to continue with increases in mortgage interest rates, as they build in the markets' expectation that the Bank of England will still raise interest rates in the near future. The clock is ticking on a rate rise."
"It didn't happen today but most agree that a base rate rise is on the way and over the next few months we could even see rates rise to their pre-pandemic level of 0.75%. Whilst the Bank of England is under pressure to keep inflation under control, much of the predicted rise and fall in inflation is already baked in and will happen irrespective of their actions today and over the coming months."
"It's a living hell for so many small businesses right now so Thursday's decision to leave rates on hold is a minor reprieve. Small businesses are being hammered from so many corners, from supply chain issues and rising prices to the end of all support schemes. But we know rate rises aren't far off."
"Many will be surprised by the Bank of England's decision to leave the base rate unchanged at 0.1%, including mortgage lenders who've raised rates recently in anticipation. This could see lenders pause for breath on further rate rises until the next announcement."
"The decision to hold the base rate is simply delaying the inevitable, but it gives borrowers an extended period to take advantage of the historically low price of debt, which is great for them but rate rises are around the corner for everyone. With all the coverage around rate rises, it may be a sensible decision to hold off just now to retain consumer confidence and avoid panic."
"The only real surprise about today's decision to leave interest rates unchanged is that it seemingly goes against recent comments from Governor Andrew Bailey over the last few weeks who was talking about the need for rates to rise. Economically, you can understand the decision to keep rates at the lowest levels for a little longer but this has surprised the market to some extent."
"The signal the Bank of England has just sent is unambiguous; the current inflation may be temporary, and the economy is currently very fragile. However, the monetary policy committee seems to have set its sights on raising the base rate to 1% by the end of 2022. So what does this mean for most people? If you've got a mortgage and your deal is coming to an end, you've been given a short reprieve before we see significant mortgage rate rises. My advice? Get on with it now."
"The Bank of England leaving rates untouched today is very welcome. We all know that we need to keep inflation in check and that there needs to be change eventually, but doing so this close to Christmas would have been a set back for the high street. We now need to sort out the supply chain problems and discover the true impact of the end of the furlough scheme so that we can chart a more accurate course in 2022."