Last week, the Bank of England lowered interest rates from 4.75% to 4.5%. raising questions about the potential implications this could have on the UK business economy.
In a speech following the decision, Andrew Bailey, the Bank of England Governor, said:
“…we expect to be able to cut bank rates further as the disinflation process continues.”
The UK’s economy is in a period of stagnation and uncertainty lingers over international market trade. Thus, Bailey also warns they will remain vigilant, proceeding “carefully” and taking each meeting regarding interest rates, which occurs every six weeks, as it comes. They will judge how far and how fast rates are lowered in response to the economy.
A main indicator for the necessity of this lowering is the predicted growth of the UK’s economy in 2025. Growth is estimated to be at half its expected rate in November, at just 0.75%.
In terms of loans, many businesses will be looking to secure financial aid during this time of lowered interest rates and growing uncertainty. A long-term loan with the current rates could mean SMEs spending less on interest and improving overall cash flow through lengthened repayment periods. As a result of higher cash flow, these businesses will benefit from investment and growth.
At AJL Finance, we provide loans for up to seven-year periods starting at £5,000. For SMEs, such as vets, solicitors, architects and engineers, we can guide companies through the UK’s current economic climate. Try our free eligibility checker now to see how we can help you.
