Cost pressures remain sky high despite interest rate cut – Chamber

The Bank of England yesterday cut interest rates to 4.25 per cent – the lowest since May 2023.

But business leaders have warned that firms are still seeking a “platform of stability” due to sky-high cost pressures and a challenging domestic and global environment.

The Bank’s nine-person Monetary Policy Committee was divided – with five in favour of the cut to 4.25 per cent, two wanting a bigger cut to 4 per cent and two wanting no change.

Raj Kandola (pictured), director of external affairs at Greater Birmingham Chambers of Commerce, said: “It was no surprise to see the Bank of England cut interest rates yesterday given the challenges circumstances many businesses continue to deal with both home and abroad.

“Our latest Quarterly Business Report revealed that cost pressures remain sky high for many businesses and despite yesterday’s announcements on a framework trade agreement between ourselves and the US, the potential impact of an escalating global trade war weighs heavily on those firms that currently trade overseas.

“Looking ahead, we suspect the Bank of England will continue to tread with caution when it comes to further interest rate cuts so we will need the Government to show leadership and create a platform of stability that will give businesses the confidence to invest and grow.

“Creating a tax roadmap to reduce domestic costs and cultivating closer ties with international markets would mark a sensible start.”