Expert warns Starmer's words won't pay the bills and SMEs need action - London Business News | Londonlovesbusiness.com
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Expert warns Starmer's words won't pay the bills and SMEs need action - London Business News | Londonlovesbusiness.com
"The Bank of England's decision to maintain the base interest rate at 4% until 2026 offers UK SMEs a rare opportunity amidst these ongoing economic challenges. This stability is crucial as inflation remains at 3.8%, creating a complex landscape that demands careful navigation by businesses. However, while stable interest rates can provide predictable borrowing costs - enabling SMEs to plan investments and manage cash flow - persistent inflation means that operational expenses are still rising, putting pressure on profit margins across various sectors."
"Different industries are feeling the effects of the current economic climate in unique ways. The retail sector is struggling with rising costs of goods and labour, which are forcing many businesses to pass on these expenses to consumers, often resulting in decreased sales. The hospitality and leisure industries are still recovering from the pandemic's destructive impact, grappling with fluctuating demand as consumers adjust their spending habits in light of the cost-of-living crisis."
"For SMEs to truly thrive, we need to see a comprehensive approach that effectively addresses the rising costs of doing business. The government's Small Business Plan, with its emphasis on tackling late payments and improving access to finance, marks a promising start, and while initiatives such as appointing a Small Business Commissioner and introducing a £4 billion support package are certainly positive steps forward, they won't adequately alleviate the ongoing financial strain that SMEs are contending with on"
UK small and medium-sized enterprises are facing rising operational costs and inflationary pressures that undermine growth potential. The Bank of England's decision to hold the base rate at 4% until 2026 creates borrowing-cost stability that can support investment planning and cash-flow management. Inflation at 3.8% continues to push up expenses, squeezing profit margins across sectors. Retail firms face higher goods and labour costs that often lead to passed-on prices and reduced sales. Hospitality and leisure are recovering unevenly from the pandemic amid fluctuating demand. Service industries struggle with talent retention as wage bills rise. Government measures target late payments and finance access but may not fully offset cost pressures.
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