The Bank of Englandโs decision to cut the base rate by 0.25 percentage points reflects higher confidence in the outlook for medium-term inflation, which will be received well by small business owners, in particular.
The central bank will continue to operate in an uncertain environment as they await updates about trade policy.
Small business owners are likely to feel some respite following today’s decision to cut interest rates. For many, it will ease the cost of servicing any debts and potentially give customers some extra pounds to spend with them. The decision also reflects both the increased confidence it has about the medium-term inflation outlook and concerns about the outlook for global growth.
The Bank of England is operating in an environment of uncertainty as it awaits more information on US trade policy. The UK’s trade relationship with the US is largely in services not goods, which will limit the direct impact of US tariffs on most UK businesses. However, secondary impacts could flow through to the UK economy if US economic growth slows considerably.
During these uncertain times, small business owners must continue to work with their advisors to stay informed about the impact of policy changes. They should also make full use of technology to gain clear visibility into the current and future finances of their business so they can navigate any changes.
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