For more info : www . cfsorg . com |
“ You have a lag between the rates going up and them impacting on company balance sheets because companies tend to work on fixed interest rates , so they lock into a debt rather than being on a variable rate . It ’ s only when their debt needs to be rebroked that they ’ ll have to suffer the consequences of the higher interest rates .
“ Also , it means they ’ ve already had a period of higher earnings without the impact of interest rates reducing spending . Interest rates going up means people ’ s credit card and mortgage debts become more of a burden and that means they ’ ve got less to spend elsewhere . But it takes a while before they realise they have to cut their spending . So you do have a good six to 12 months before it impacts purchasing .
“ The MPC is meant to set interest rates looking forward 12 months on inflation but because of Brexit and concerns over the strength of the UK economy they ’ ve allowed inflation to get ahead of itself , above their target , and now they ’ re trying
|
to chase their tail a little bit so that ’ s why we ’ ve had a bit of a jump in interest rates . It doesn ’ t necessarily mean bad news for investment .”
“ It doesn ’ t necessarily mean bad news for investment ”
|
For more info : www . swbf . co . uk |
“ The base rate rise will increase costs of finance if your business loan is linked to base rate , however based on the lending criteria , the banks will have built in a contingency for interest rate rises and with a rise of only 0.25 % you shouldn ’ t find this too onerous . Those businesses who have LIBOR-linked lending will probably find that LIBOR will follow suit shortly .
“ On the flip side , the fact the rates have risen should give a bigger confidence to the market as it is a sign of strength , but again I think the smaller , more local businesses won ’ t feel any effect of this and they will only be affected with an increased monthly cost .”
“ The fact the rates have risen should give a bigger confidence to the market ”
|