Interest rates freeze will calm some Shropshire business fears

The Bank voted to freeze the base rate at 5.25 per cent for a second successive month – a move which had been widely predicted.

Ruth Ross, Shropshire Chamber’s chief executive, said: “There is no doubting the fact that this decision will allay some concerns among businesses.

“The results of our most recent quarterly economic survey showed that interest rates are now firmly established as one of the biggest concerns for Shropshire businesses, alongside high inflation.

“This is especially true for smaller firms and those in the consumer-facing sectors, who have had to cope with the perfect storm of rising borrowing costs and decreased customer demand.”

She added: “While we appreciate that the Bank has raised interest rates primarily to help drive down inflation, there is a delicate balancing act needed here so that companies with investments are still able to get attractive returns.

“Signs are also beginning to emerge of the very tight labour market in Shropshire slowly starting to ease, and also a number of companies in the construction sector which are closing – we have to be mindful of these factors too.”

David Bharier, head of research at the British Chambers of Commerce, said: “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.”

With inflation set to ease further, and GDP and labour market data indicating the economy is cooling, the BCC says the Chancellor’s Autumn Statement on November 22 must set out a plan for growth.

Paul Butterworth, CEO at Chambers Wales South East, South West and Mid, said: "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 per cent 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.”