Pressure Of Interest Rates On Business Revealed

·         BCC survey of more than 1,000 UK businesses finds one third (33%) are negatively impacted by the current Bank of England interest rate. 

·         Small and mid-sized firms (39%), manufacturers (36%) and business to consumer firms (37%) are more likely to report a negative impact. 

·         Just one in 10 firms (9%) say they are positively impacted by the current interest rate – relating to higher earnings on surplus funds.

The main negative effect cited by businesses was increased costs for new and current finance, which is either restricting investment or limiting cashflow.  Firms also referenced a tightening in consumer spending, reduced demand for housing, and higher costs for Covid recovery loans. 

But the scale of the negative impact has fallen from 46%, when businesses were last asked the question in July 2023. 

Firms were also asked what they would set the interest rate at, if they were in charge, and 4% was the median average response.  

   Alex Veitch, Director of Policy at the BCC, said: 

“With all eyes on the Bank of England’s latest interest rate decision next week, our data is a timely reminder about the pain many businesses are suffering at the current level of 5.25%.   

“Firms tell us every day that they are struggling to pay off debts, some dating from the pandemic, and finding it difficult to take out new loans.   

  “Business investment is fundamental to the economic growth everybody wants, but firms will only be able to invest when their financial burdens ease.   

  “Expectation continues to mount that a cut in the interest rate is on the horizon, and this is likely reflected in the lower negative impact cited by businesses now compared to July last year. 

“But with firms indicating that a rate of 4% would be acceptable, it suggests there is some way to go before the squeeze on companies’ borrowing costs is relieved.” 


About the BCC Insights Unit    

  The BCC Insights Unit brings together all the strands of research the BCC undertakes, including the Quarterly Economic Survey, the largest private sector business survey in the UK; the Quarterly Economic Forecast, currently ranked by the Sunday Times as the country’s second most accurate; and a leading programme of business surveys which inform the national economic debate. The Insights Unit was launched on 3 July 2023.         

About the British Chambers of Commerce - Where Business Belongs       

The British Chambers of Commerce (BCC) sits at the heart of a powerful network of 53 Chambers of Commerce across the UK, representing tens of thousands of firms. It provides a unified voice for these companies, rooted in their communities, at the national level. We link our UK network with over 75 international member chambers, to promote trade and investment, and work for a better future for businesses around the world.       

    For more information, visit:



British Chambers of Commerce

The British Chambers of Commerce (BCC) sits at the heart of a business network that spans the length and breadth of the UK, with links to markets across the world.

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