The Bank of England has lowered interest rates from 4.5% to 4.25%, driven by fears surrounding President Trump's tariffs and their effects on the global economy. This change is expected to relieve some pressures on businesses, particularly small and medium-sized enterprises (SMEs). Mike Randall from Simply Asset Finance emphasizes the need for tangible solutions from the government for SMEs. Meanwhile, lower borrowing costs may boost mergers and acquisitions (M&A) activity, according to Hamish Martin of LAVA Advisory. However, Stephen Brockway of Maru notes that the cut might not significantly impact household finances, particularly for those without mortgages.
This month's rate cut will ease some pressure for businesses under strain, especially following recent National Insurance changes, and provides hope for a more stable environment that can foster long-term growth and investment.
Lower borrowing costs open the door for more leveraged deals, and we're already seeing increased interest in lower-mid-market assets that might have been priced out just a few months ago.
While a reduction in interest rates may offer a modest boost to household finances, it's not a major concern for most people right now - particularly for those without a mortgage.
#bank-of-england #interest-rates #global-economy #small-and-medium-enterprises #mergers-and-acquisitions
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