Interest Rate Cut Welcomed

“Cutting interest rates will have been a difficult decision to make, but the Forum of Private Business (FPB) believes it is the correct one,” explains the FPB’s director of finance, Nick Palin. “With many analysts predicting that the UK is already in a recession, or very close to one, this decision should boost the market and hopefully will inject some confidence in to it.”

Similarly, Stephen Robertson, the British Retail Consortium director general, says, “This bold action by the Bank of England is the right decision and will be welcomed by hard-pressed customers and retailers. The banking crisis is undermining consumer confidence and a significant rate cut was necessary to restore it while stimulating the high street and the rest of the economy.”

However, some are worried businesses won’t benefit immediately. “This should be very helpful to Britain’s small businesses, but the welcome cut will only come into play if the banks follow through and reduce their charges to small businesses accordingly,” says John Wright, national chairman of the Federation of Small Businesses (FSB). “We would urge the Government, now that it has a stake in the banks, to ensure all base rate cuts announced by the Bank of England are honoured by the clearers.”