Skip to main content
We're here with practical information for your business. Learn about business planning, running a business and more.

Search

For a successful business, you need a viable business idea, the skills to make it work and the funding. Discover whether your idea has what it takes.

Forming your business correctly is essential to ensure you are protected and you comply with the rules. Learn how to set up your business.

Advice on protecting your wellbeing, self-confidence and mental health from the pressures of starting and running a business.

Learn why business planning is an essential exercise if your business is to start and grow successfully, attract funding or target new markets.

It is likely you will need funding to start your business unless you have your own money. Discover some of the main sources of start up funding.

Businesses and individuals must account for and pay various taxes. Understand your tax obligations and how to file, account and pay any taxes you owe.

Businesses are required to comply with a wide range of business laws. We introduce the main rules and regulations you must comply with.

Marketing matters. It drives sales and helps promote your brand and products. Discover how to market your business and reach your target customers.

Some businesses need a high street location whilst others can be run from home. Understand the key factors from cost to location, size to security.

Your employees can your biggest asset. They can also be your biggest challenge. We explain how to recruitment and manage staff successfully.

It is likely your business could not function without some form of IT. Learn how to specify, buy, maintain and secure your business IT.

Few businesses manage the leap from start up to high-growth business. Learn what it takes to scale up and take your business to the next level.

Could the Bank of England interest rate fall this week?

19 March 2024

Financial analysts predict that the Bank of England is likely to reduce interest rates in the coming months but will they cut the rate when they meet this week? Businesses are certainly hoping for good news but most economic pundits expect the rate to stay the same.

The Bank of England (BOE) has held interest rates at 5.5% for the past six months. Its next meeting is on Thursday 21 March. Despite predictions that BOE interest rates are likely to come down over the next year, there is no consensus on what will happen this week.

The Bank of England has to balance the needs of the economy while making sure that inflation doesn't creep back up. This month, the Office for Budget Responsibility (OBR) said it expected inflation to hit an average of 2.2% over the course of 2024 and 1.5% over the duration of 2025, before it climbs back towards the Bank of England's 2% target. If this happens, the OBR predicts that interest rates could fall to 4.2% by the final quarter of the year and 3.3% in 2025.

Businesses struggling because of high interest rates

A new survey of more than 1,000 UK businesses, conducted by the British Chambers of Commerce (BCC), has found that 33% say they are negatively impacted by the current Bank of England interest rate of 5.5%. Small and mid-sized firms (39%), manufacturers (36%) and business-to-consumer firms (37%) are more likely to report a negative impact.

The research shows that only 9% say they are positively impacted by the current interest rate - relating to higher earnings on surplus funds. The main negative effect cited by businesses was increased costs for new and current finance, which is either restricting investment or limiting cashflow. Firms also referenced a tightening in consumer spending and higher costs for COVID recovery loans.

However, the scale of the negative impact has fallen from 46%, when businesses were last asked the question in July 2023. Firms were also asked what they would set the interest rate at, if they were in charge, and 4% was the median average response.

"With all eyes on the Bank of England's [next] interest rate decision, our data is a timely reminder about the pain many businesses are suffering at the current level of 5.25%. Firms tell us every day that they are struggling to pay off debts, some dating from the pandemic, and finding it difficult to take out new loans. Expectation continues to mount that a cut in the interest rate is on the horizon, and this is likely reflected in the lower negative impact cited by businesses now compared to July last year. But with firms indicating that a rate of 4% would be acceptable, it suggests there is some way to go before the squeeze on companies' borrowing costs is relieved." Alex Veitch, BCC director of policy.

The last time the Monetary Policy Committee (MPC) met, on 1 February 2024, it decided to keep interest rates at 5.25%. Businesses are hoping for a different decision this Thursday.

Written by Rachel Miller.

Stay up-to-date with business advice and news

Sign up to this lively and colourful newsletter for new and more established small businesses.