Bank of England’s stimulus will boost business confidence
IPSE has responded to the Bank of England’s Monetary Policy Committee (MPC)’s decision today (Thursday 4 August) to cut interest rates to 0.25 per cent and increase its Quantitative Easing (QE) program.
IPSE Economist, Lorence Nye, said: “The Bank’s decision to provide stimulus to the economy, by cutting interest rates, increasing its asset purchases and beginning a programme of corporate bond buying, will be welcomed by businesses suffering a decline in confidence.
“A variety of surveys have pointed to a decline in business confidence since the EU referendum. IPSE’s latest Freelancer Confidence Index (FCI) has told a similar story, with freelancers expecting to see both the performance of their businesses and the wider economy worsening over the next 12 months. Both confidence indicators are at their lowest since the survey began. It’s clear that freelancers need all the support they can get.
“The Bank has gone further than simply cutting rates to stop any negative sentiment translating into a decline in business activity. While monetary policy is supportive, its capabilities appear to be stretched given rates are so low and QE has been in place for years. For this reason the government should remain poised to act if an economic slowdown still occurs over the coming months.”