Interest rate hold good for business, but Government must be poised to act
IPSE has today responded to the Bank of England’s decision to maintain interest rates at their current level of 0.25%.
Lorence Nye, IPSE Economic Policy Adviser, commented: “The decision will be welcomed by the UK’s smallest firms. After the August rate cut assisted the economy through Brexit, the MPC is prudent to keep rates on hold until we have clearer data on the last three months.
“In the run-up to the referendum a number of studies, including IPSE’s own research, showed freelancers’ confidence in both the economy and their own business outlook declining rapidly. We’ll therefore be looking forward to the third quarter GDP figures for a more reliable indicator of the effects of Brexit – which should inform the MPC’s decision next month.
“If the picture looks set to worsen, the Bank now has limited options, given the rate is already so low. This means that the government should also be poised to step in and provide fiscal stimulus. UK businesses will be looking to the Autumn Statement for an indication of this support.”