A rate cut could boost SME confidence, global uncertainty and future hikes could limit the long-term impact – so ongoing investment and planning is key to stay afloat.
All signs point to a May rate cut from the Bank of England – a potential green light for SME investment, as over six in 10 (62%) SMEs say they will feel more confident investing if rates fall. But in today’s uncertain climate, a cut no longer holds the promise it once did.
On paper, lower rates should be a boost for SMEs and the economy, easing borrowing costs and encouraging business investment. But relief from a cut could be short-lived, as the Bank may need to raise rates again later in the year to curb inflationary pressure due to tariffs friction.
This threatens to dampen SMEs’ ambition – meaning investment plans are delayed further, but SMEs can’t afford a ‘wait and see’ approach to decision making. Against economic uncertainty, businesses that continue to invest and plan for every scenario will stay ahead of the competition.
