Bank of England holds interest rates: Stability provides breathing space for businesses
Despite the US Fed increasing their rates by 0.25% yesterday, The Bank of England's Monetary Policy Committee (MPC) has today voted to maintain the base rate at 3.75%, providing businesses and borrowers with a short period of stability however forecasters, including Goldman Sachs, are now anticipating an increase to 4% before the year end.
By John Mitchell, Managing Director, Christie Finance
Why stability matters
Interest rate stability allows businesses to make longer-term decisions around investment, recruitment, acquisitions and property purchases.
Although borrowing costs remain elevated compared with historical averages, today's decision removes some short-term uncertainty from the market.
This is particularly relevant for businesses considering:
- Commercial property purchases
- Business acquisitions
- Expansion projects
- Equipment and asset investment
- Refinancing existing facilities
What commercial lenders are telling us
In recent months we've seen lenders competing strongly for quality business and funding remains available across a wide range of sectors, with appetite continuing for:
- Hospitality and retail businesses
- Care sand education operators
- Professional services firms
- Commercial property investors
- Multi-site operators
This competition is helping businesses access attractive funding structures despite a higher-rate environment.
Looking ahead
The MPC will continue to monitor inflation, wage growth and wider economic conditions, and future decisions will depend on how these factors develop over the coming months with the market and leading forecasters anticipating an upwards adjustment before the year end.
Businesses considering borrowing should use this window to assess funding options, compare lender appetite and ensure they are well-prepared should market conditions change later in the year.
At Christie Finance, we continue to help businesses identify the most suitable funding solutions and negotiate competitive terms across the lending market.