Responding to the Bank of England’s Monetary Policy Committee’s vote to cut the base rate to 4.25%, Federation of Small Businesses (FSB) National Chair Martin McTague said:
“The cut in the base rate is good news, but against a backdrop of low small business confidence, we cannot pretend the road ahead is rosy.
“For this cut to have a meaningful impact, lenders must pass the savings onto their customers. Small businesses currently face significant barriers to accessing affordable finance, with many applications being rejected or only offered at high rates. Without lenders passing on base rate cuts in full, this opportunity for growth could slip away.
“Personal guarantees are also holding back small firms’ willingness to invest, by turning what should be business loans into a personal financial product, but without the protections afforded to consumer lending. The Government must act now to regulate personal guarantees and ensure that they are only used by lenders in a proportionate way.
“Small firms could drive growth if given the right conditions – but now they are battling a combination of low confidence, late payments, and tax compliance costs. All these sap cash flow, and cash is the lifeline small businesses cannot afford to lose.
“The looming Employment Rights Bill risks tipping many over the edge by allowing unfair dismissal claims from day one and adding the cost of Statutory Sick Pay from the start of employment.
“The Spending Review must deliver a Statutory Sick Pay rebate, and the upcoming Small Business Strategy must finally tackle late payments.”
About FSB
FSB is a non-profit, non-party-political grassroots business organisation that provides its members with a wide range of vital business services. These include advice, financial expertise, legal support and a powerful voice heard in Government for over 50 years. More information is available at www.fsb.org.uk. You can follow us on X/Twitter: @fsb_policy; on LinkedIn: FSB Westminster; and on Bluesky: @fsb-uk.
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