Rate cut brings relief to UK SMEs

We welcome today’s decision by the Bank of England to reduce the base rate to 4%, supporting the ‘gradual and careful’ approach Governor Andrew Bailey highlighted. For SMEs across the UK, this move provides some much-needed breathing room to help tackle the weakening labour market and ongoing difficult economic times. The recent 0.1% upgrade in 2025 growth forecasts by the International Monetary Fund also comes as a small light in the dark.

SMEs are considered the lifeblood of the UK economy, and this rate cut shows that the Bank of England and wider policy committees are supporting them in a time of need. It is a step in the right direction towards enabling growth, investment and job creation.

Although inflation remains a concern, this decision shows an understanding of the struggles SMEs face on a daily basis. We would encourage this trajectory to continue with ongoing rate reductions in 2025 and into 2026.