The Bank of England has cut interest rates from 5% to 4.75%.

Gus Williams, interim CEO at Chambers Wales South East, South West and Mid, said:

“With inflation below the Bank of England’s target of 2%, today’s interest rate cut was expected and will be welcomed by businesses in Wales. In our Quarterly Economic Survey for Q3, 29% of businesses in Wales were concerned by interest rates. As inflation has come under control and interest rates begin to decrease, taxation has become the most concerning external factor for Welsh businesses.

“Further interest rate cuts in December are now more uncertain following political events such as the Autumn Budget and the US election results. This, combined with the comprehensive tax measures announced in the Budget, will see businesses in Wales looking to the Welsh Government’s own budget next month for economic clarity and stability to enable them to plan for long-term growth.”

David Bharier, Head of Research at the British Chambers of Commerce, said:

“As businesses continue to digest the difficult implications of last week’s Budget, a further interest rate cut is some good news for firms.

“The cost of borrowing remains a major barrier to investment. Our research shows less than a quarter of companies boosted investment in Q3. The economy will continue to struggle until this changes.

“The continued easing of inflation is likely to translate into further gradual rate cuts. However, there could be some bumps on the way. Services inflation remains stubborn, and major global conflicts continue to bring uncertainty. A decisive Trump presidential victory has powered US stocks to all-time highs, but a policy of tariffs could be inflationary.

“We’re expecting to see a number of long-term plans from the UK Government early next year covering infrastructure, investment and trade. It’s critical that these plans are outlined and delivered at pace, to give business the opportunity to help drive growth.”