UK businesses should prepare for interest rate hike

The Bank of England (BoE) has revised its growth forecast for the year from 3.4% to 3.5%. However, BoE Governor Mark Carney has dampened hopes of an imminent interest rate rise, cautioning that any increase would be gradual and limited. The BoE expects rates to be lower than those of ‘yesteryear’, forecasting them to hit only 2.25% in 2017.

Carl Hasty, director of international payments specialist Smart Currency Business, said: “This instance of monetary policy is governed by many factors, like slack in the unemployment market, lower-than-desired productivity in the UK economy, and inflation still exceeding wage growth.

“Although Carney has promised that any interest rate rises will be gradual, businesses need to plan in advance to ensure that they can keep their cashflow healthy and cut costs where possible. Any businesses that have not done so should start thinking about it now.”