The Bank of England’s decision to increase the base rate from 4% to 4.25% has left small businesses hoping this will be the peak, as they struggle with high inflation and rising rates.
Federation of Small Businesses (FSB) National Chair Martin McTague said, “Small businesses are counting on today’s rise in the base rate to be the peak, as the Bank of England predicts a steeper than anticipated fall in inflation, even following the unexpected rise we saw earlier this week.”
McTague expressed concerns over the impact of inflation on small firms, stating, “Inflation is exacting huge tolls on small firms, who are even more exposed to spiralling input costs than large businesses, as they lack big corporates’ buying power and the ability to hedge prices.” The latest increase in the base rate has left small businesses with floating-rate debts worried about their financial futures.
McTague also expressed disappointment in the recent Budget, which he believes lacked sufficient measures to support small firms. He called on the government to stand by small businesses, emphasising the importance of their role in driving economic growth: “The Government needs to demonstrate that it is on the side of small businesses who are feeling stressed and under huge margin pressure. We can’t afford to lose huge swathes of small firms, who could under the right circumstances be the engine of growth we need to get us out of our current economic doldrums.”