Interest rate held at 3.75% prolongs wait for businesses looking for better borrowing rate

Richard Blackmore from The East Midlands Chamber

For businesses looking to borrow to invest and grow, East Midlands Chamber has said the Bank of England’s decision to keep the interest rate unchanged at 3.75% will maintain a sense of stability but add frustration for those hoping for an improved rate.

East Midlands Chamber Director of External Affairs Richard Blackmore said: “With inflation having risen even further from the Bank of England’s target of 2%, and now at 3.1%, businesses looking to borrow, to invest to grow, may take some comfort that the interest rate has not, at this stage, increased. That will give a sense of stability and predictability, for the time being at least.

“For those firms eager for a better borrowing rate to help with investment plans, frustration will have been prolonged, especially when an increase, rather than a cut to the interest rate later this year is still a distinct possibility due to the rising inflation we’re seeing.

“With the level of cost pressure on business showing no let-up and continuing to squeeze funds and inhibit investment, employers will be looking to the Autumn Budget on 28th October for the Chancellor to announce measures that are supportive of business sustainability and growth.

“Business needs to see wider energy cost support, a much wider review of business rates than we’ve seen so far and corporate taxation reduced. It’s essential the Chancellor delivers a Budget that incentivises business to invest and unlocks growth on that day.”