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2nd November 2023

Interest rates remain unchanged

Today (2 November), the Bank of England announced that interest rates would remain at 5.25%.

Paul Butterworth, CEO at Chambers Wales South East, South West and Mid, said:

“The Bank of England has announced today that interest rates remain unchanged at 5.25%. While businesses in Wales will be relieved to see no further rise this month, interest rates are still at their highest level for 15 years and causing concern for firms across the country.

“Our research shows that interest rates have grown as a key issue among businesses in Wales, along with inflationary pressures. Our Quarterly Economic Survey results for Q3 show that interest rates are more of a concern now than three months ago for 54% of Welsh businesses, a figure that is 9% higher than the UK level.

“SMEs have been operating in an uncertain landscape for some time and although steps are being taken to reduce inflation and hold interest rates in the short-term, businesses will need reassurance from policymakers that there are clear plans for growth in the longer term to boost business confidence and investment strategies rather than economic stagnation.”

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

“Today’s decision to again hold the interest rate at 5.25% will allay some concerns of the businesses we speak to that are unable to stomach further rises.

“Our research has shown that interest rates have grown as a key issue among companies. This is especially true for smaller firms and those in the consumer-facing sectors, who have seen rising borrowing costs and decreased customer demand.

“The BCC’s Quarterly Economic Survey for Q3 found that 45% of all firms cited interest rates as a concern. With inflation set to ease further, and GDP and labour market data indicating the economy is cooling, the Chancellor’s Autumn Statement must set out a plan for growth.

“SMEs have been operating in an uncertain climate for too long, with policies constantly chopping and changing over the past few years. They need to see clear direction from decision makers, creating a roadmap for business that really boosts confidence and investment.”

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