Rate Cut Will Help Firms in Choppy Waters

8th August 2025

David Bharier, Head of Research at the British Chambers of Commerce, responds to the latest interest rate decision by the Bank of England

Responding to the latest interest rate decision by the Bank of England, David Bharier, Head of Research at the British Chambers of Commerce said: 

“Businesses will welcome the decision to cut the base rate to 4%, marking a further move away from a prolonged period of elevated borrowing costs. With signs that the labour market is beginning to loosen and unemployment edging upwards, the Bank is right to act to mitigate the risk of a deeper downturn. 

 

“SMEs in particular have been under sustained pressure from cumulative cost increases and external shocks.  The impact of April’s national insurance rise is now tangible, with firms reporting reduced investment and recruitment plans. As today’s report by the Bank highlights, our Q2 survey showed 56% of firms citing tax as bigger concern than earlier in the year. Ongoing global disruptions have compounded the unpredictability. 

 

“Rate cuts alone are only part of the solution. To restore business confidence, firms will need to see a roadmap to lower their cost burden, further improvements to ease trade friction, and greater investment in AI and infrastructure.”