"Although we expect inflation to return to our 2% target, we're not out of the woods yet so any future cuts will need to be made gradually and carefully."
"Today's Bank of England decision to hold interest rates at 4% comes as little surprise, given yesterday's announcement that inflation remains significantly higher than the Bank's target. With the ONS forecasting weak GDP growth and the tightening of the labour market, it feels unlikely that interest rates will fall this side of the New Year. While UK SMEs are demonstrating resilience in the face of difficult trading conditions, economic challenges continue to apply further pressure. The Chancellor has a critical opportunity in the Autumn Budget to prove that SMEs remain at the centre of the government's growth strategy. What that looks like is simpler taxes and greater incentives to help small businesses not only survive, but flourish."
The Bank of England has held interest rates at 4% as inflation rises and food prices soar partly due to tax increases. Although inflation is expected to return to the 2% target, the economy is not out of the woods and any future rate cuts must be implemented gradually and carefully. Inflation remains significantly above the Bank's target, and weak GDP forecasts combined with a tightening labour market make rate cuts unlikely before the New Year. UK SMEs show resilience under difficult trading conditions but face ongoing pressure from higher costs. The Autumn Budget is an opportunity to support SMEs through simpler taxes and stronger incentives.
Read at London Business News | Londonlovesbusiness.com
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