Shock interest rate rise

"With many consumers and businesses already struggling with an increase in costs, raising interest rates will only make this an even more difficult time. It impacts small businesses as costs soar and customers cancel or delay projects until they can afford them. Couple this with another possible lockdown on the horizon and the outlook for many small businesses is bleak. Many will now struggle well into next year."

"Despite the headlines of an interest rate 'hike', I think we need to keep things in perspective. A base rate of 0.25% is still incredibly low. We should aim to move slowly towards more normal rates to protect savers who are seeing their savings ravaged by inflation. A 0.15% increase in rates is only 80p a day in extra interest on the average £193,000 mortgage."

"I'm expecting at least two more base rate increases over the next few months. Inflation is taking hold and the Bank of England must be concerned about it fuelling higher wage demands, further baking inflation into the system. I think property prices could fall quite sharply next year, and that the volume of mortgage transactions will be far lower, which will hurt our business. But much will depend on how Omicron plays out."

Let's be honest, this has been on the cards with inflation going through the roof and we have been telling anyone who will listen to secure a new fixed rate deal sooner rather than later. In reality, this is a very small increase and will take time to make much of a significant difference to actual mortgage interest rates which have crept up anyway in expectation of a rate rise happening anyway. It does seem that the Omicron variant on the rampage we're just going to have to deal with a slight bit of short term pain until it burns itself out but that the spectre of sky high inflation poses a bigger long term problem to household finances that needs to be got to grips with.

An absolute hammer blow for the beauty & hospitality industries. With the rise of Omicron infections causing many businesses to cancel office parties our cancellation are spiralling and we now face an even greater risk of a cashless Christmas with the interest rates going up.. We have had to take out loans over the past year to cope with the Covid Pandemic with our businesses not being able to open as the majority of us received absolutely no financial assistance and now face having to pay higher repayments per month and the possibility of further restrictions and Lockdowns.. I see lots of people in these industries needing Food bank help because in the beauty industry we are predominantly self employed.. No customers mean no pay..

The news of an increase in interest rates will be hugely concerning for business owners who rely on short-term bank funding and presents another formidable obstacle for them to overcome. What this really amplifies is the importance of cashflow forecasting and building in headroom to cover eventualities like this. As a company that works closely with businesses, we understand the knock-on effect this will have to those firms that need to borrow, the majority of whom will be unable to pass on those additional costs. Some could now suffer from less disposable income and more overheads if they pay more in interest on a bank overdraft or credit card than the loan itself. In the climate we’re currently in, it’s never been so important for a business to partner with a funder who will support them and provide funding options that won’t hold their businesses back. There are options out there, like Invoice Finance for example, which will typically charge lower rates of interest than a bank overdraft. So, with interest rates likely to increase again in the new year, it’s crucial that businesses know the funding options out there and how the costs compare.