A BANK of England cut to interest rates will be welcomed by businesses and firms in Bradford, the West& North Yorkshire Chamber of Commerce has said.
UK interest rates have fallen to 4.5 per cent after the Bank of England voted to cut borrowing costs, as it also slashed short-term growth forecasts for the economy.
The Bank’s Monetary Policy Committee voted for a quarter-point reduction after similar cuts in August and November last year, bringing the base rate to its lowest point since June 2023.
Mark Casci, head of policy and representation at West & North Yorkshire Chamber of Commerce, said: “The news that the Bank of England’s Monetary Policy Committee has cut interest rates by 0.25 per cent will be welcomed by businesses.
“Firms are struggling with cost pressures across the board so anything that eases these challenges will be treated as a positive.
“Business confidence has been falling for several months and the number of firms forecasting improved revenues is falling.
“What needs to happen now is a concerted effort by Government to ease overheads for firms. Doing so will unlock investment opportunities, boost trade, create jobs and bolster revenues for the Exchequer.”
The base rate helps dictate how expensive it is to take out a mortgage or a loan, while it also influences the interest rates offered by banks on savings accounts.
The Bank halved its growth forecast for the UK economy to 0.75 per cent for this year, down from previous estimates of 1.5 per cent, before accelerating again in 2026 and 2027.
The downgrade is a blow to chancellor Rachel Reeves after Labour made growing the economy its key priority.
Ms Reeves said the interest rate cut was “welcome news”.
“However, I am still not satisfied with the growth rate,” she said. “Our promise in our Plan for Change is to go further and faster to kick-start economic growth to put more money in working people’s pockets.”
It also comes amid signs inflation is rising again, with forecasts pointing to a higher-than-expected peak of 3.7 per cent later in the summer.
The Bank said the increase to inflation, which measures the rate of price rises across the economy, is mainly down to higher-than-expected energy prices, as well as rising water bills and bus fares.
Despite the cut to near-term growth forecasts, the Bank said the economy would grow faster than expected in the longer term, with a growth rate of 1.5 per cent for 2026 and 2027.
The rate cut means the average mortgage holder on a tracker deal will see their monthly payments fall by £28.98, according to figures from industry body UK Finance.
The average borrower on a standard variable rate will see monthly payments drop by £17.17.
