Reward calls for rate reduction to ease SME pressures

Although the International Monetary Fund has recently upgraded its growth forecasts for the UK by 0.1% for 2025, we are still living in incredibly difficult times. We encourage the Monetary Policy Committee to prioritise economic momentum and provide the necessary support for SMEs by reducing the base rate at the upcoming review.

The labour market remains weak, evidenced by unemployment levels being the highest in four years, and SMEs are still operating in increasingly challenging conditions. This is further supported by the economy contracting for two consecutive months so far.

We have seen in recent months a rise in businesses across specific sectors, such as leisure, more in need of funding than ever. This emphasises the reality of what many businesses are facing, more so in a time where traditional lenders are restricting some industries they will lend to.

Whilst we realise inflation remains above target, enabling lower borrowing costs would give SMEs some much needed relief. They are often considered the lifeblood of this country, and a cut to 4% could show commitment from the Bank of England in response to the struggles of these businesses.