Lancashire small firms' fears as interest rate rise compounds rising costs

Responding to the news that the Bank of England’s Monetary Policy Committee has raised the base rate to 0.75 per cent, Martin McTague, national chair of the Federation of Small Businesses, said: “This move will mean higher debt costs for many firms at a moment when soaring overheads are threatening futures.

“The economic consequences of the pandemic are still being felt by small businesses, whose ability to make up for lost time and income has been undermined by a vicious cycle of rising costs.

“A lot of small firms have had no choice but to increase prices in response, but this isn’t always an option, especially in sectors still trying to entice customers back, such as hospitality and tourism, and their suppliers.

“At the same time, consumer confidence has plunged and the cost-of-living squeeze has intensified, with record fuel prices and sky-high utility bills meaning loss of disposable income.

“Small businesses increasingly feel that the Government is indifferent to the cost pressures they face.

“The planned hikes to national insurance and dividend taxation taking effect in a matter of days, alongside an income tax threshold freeze, will, for many, be the final straw.

“Next week’s Spring Statement is the Government’s last chance saloon to mend relations.

“We urgently need to see the Chancellor ease the pressure on the five and a half million small firms and sole traders on which our recovery will depend.”