Following the Bank of England’s decision to hold interest rates at 0.75%, Angus Dent, CEO of business lenders ArchOver, comments. “We’re in territory where the scope to cut rates is very limited. On top of that, a 0.25% cut, which is likely the maximum we’ll see this year, saves an SME borrower £2,500 a year, assuming the whole rate cut is passed on, or £208 a month in their management accounts. That’s hardly material, there’ll be no dancing in the streets. We may as well not bother.
“As for the currency generally, what’s happening against the Euro does seem strange. Our economy is much stronger than the Eurozone’s, and yet the currency is being battered. What was it somebody said about losing their shirts?
“What about showing some confidence in the UK economy and raising rates a little? The maths of the cost increase works in the other direction too, so it wouldn’t be a big deal. However, the confidence signal would be huge.
“Desperate times call for desperate measures. Our political overlords have apparently decided that the only way out of the EU is hell for leather – the world of finance needs to follow suit if it’s to keep up.”