Tense time for businesses looking to borrow as interest rate remains unchanged and Budget looms

The Bank of England’s decision to hold the interest rate at 4% will frustrate firms planning to borrow so they can invest to grow, at a time when rumoured tax hikes at the upcoming Budget could keep conditions tough, East Midlands Chamber has said.

East Midlands Chamber Director of Policy and Insight Richard Blackmore said: “Deciding not to make a cut to the interest rate just before the Budget is not surprising but with the high cost of doing business and concern over what measures might be revealed by the Chancellor on 26th November, keeping the rate at 4% will give little comfort to firms looking to borrow so they can invest and grow. 

“The East Midlands has seen hesitant investment. Just under half the firms in the region have hired, while two out of ten have revised their training and machinery investment plans downward, as shown in our Quarterly Economic Survey which examines performance, sentiment and intentions of businesses across the region.

“With the persistent challenges faced by firms and both inflation and corporate taxation the top concerns reported by businesses in our survey, the Autumn Budget must enable growth. That means reform to business rates; it means incentivising firms to invest and it means ensuring they are not hit with further tax hikes.

“We will be in Westminster to launch the Chamber’s Framework for Growth for the East Midlands while the Budget is being announced. The key document we unveil that day sets out exactly what is needed to unlock growth and build for the future across Derbyshire, Nottinghamshire and Leicestershire, in areas ranging from improved infrastructure and connectivity to digital sustainability, clean energy, rates reform, skills investment and workforce development.”