FINANCIAL experts and business owners are divided on whether the Bank of England should cut Bank Rate at its midday interest rate decision.
Marcus Wright, Managing Director at Bolton-based Bolton Business Finance, said the doves are likely to be disappointed: “There is more chance of massive tax cuts in the Budget than rates being cut this week. Unfortunately, neither is going to happen and, as a result, British businesses up and down the country will continue their misery.
“A small rate cut would help many struggling businesses and homeowners at a time of high taxes and inflation pressure.”
Phil Ingle, Managing Director at Phil Ingle Associates, said a hold would be the right decision: “The Bank of England should not cut rates today. Inflation is still too high and the savings ratio too low.
“We know we need growth, but trying to achieve it through encouraging further borrowing will be less effective than through better Government budget management. November 26th will be more important than November 6th.”
Tony Redondo, Founder at Newquay-based Cosmos Currency Exchange, said that while the Bank of England should cut at today’s interest rate decision, it likely won’t: “The Bank of England should cut rates today. The UK economy is in desperate need of a pick-me-up. Sadly, I very much doubt it will. Not weeks before the Budget, and not when they risk being accused of political favouritism.
“I expect the November Bank of England meeting to be a close call, with the decision to leave Bank Rate unchanged at 4% passing by the slimmest majority possible. A 5-4 vote split looks possible, with Governor Bailey having to cast the deciding vote.”
Anita Wright, Chartered Financial Planner at Ribble Wealth Management, said: “Inflation is still around twice its target, so in textbook terms you would hold. But growth isn’t convincing, households feel poorer and consumer spend drives roughly 60% of GDP. Prolonged weakness now risks doing more damage than a spell of above-target inflation.
“That’s why an earlier-than-ideal cut—paired with clear guidance that further moves depend on inflation actually easing—makes sense.”
However Wright warned: “Unless fiscal policy shifts from revenue-raising to productivity-raising, a rate cut buys time but won’t change the game.”
Colette Mason, AI Consultant at London-based Clever Clogs AI, said a cut at today’s interest rate decision is essential for the tech sector: “The UK Government cannot claim to be an ‘AI Superpower’ while the Bank of England simultaneously pulls the plug on the entire innovation ecosystem.
“The Bank is forcing us to compete in a global AI race with the handbrake on. The Bank of England is strangling tomorrow’s economy to fix yesterday’s inflation.”
Rob Mansfield, Independent Financial Advisor at Tonbridge-based Rootes Wealth Management, was in the hold camp: “No, the Bank of England should hold steady at today’s interest rate decision. Inflation is still too high. With the likelihood of a tax-raising Budget later in the month, holding firm and seeing what the Chancellor announces makes the most sense.”
Like Redondo, Craig Fish, Director at London-based Lodestone Mortgages, said a cut is urgent to avoid further economic contraction: “Keeping rates this high for too long risks pushing the UK into a deeper slowdown. A small 0.25% cut would show confidence that inflation is heading in the right direction and give households and businesses some much needed breathing room.
“However, with uncertainty around the upcoming Autumn Budget and its potential impact on inflation, borrowing and government spending, the Bank is likely to err on the side of caution and hold steady for now.”
But Adam Stiles, Managing Director at London-based Helix Financial Partners, said the Budget could actually trigger a pre-emptive cut: “With the upcoming Doom Budget offering very little hope to anyone of a reprisal on the stranglehold on their wallets and bank accounts, a Bank of England base rate cut looks increasingly likely. With the pressure cooker of an economy set to boil over, hopefully the Bank of England can let the steam off with a base rate cut.”
Samuel Mather-Holgate, Independent Financial Adviser at Swindon-based Mather and Murray Financial, said we need to look beyond today’s interest rate decision and address the Bank of England’s mandate: “If the Bank of England had a dual mandate like the US, they would look to stimulate the economy. Maybe it’s time for a change of rules at Threadneedle Street.”
Scott Gallacher, Director at Leicester-based Rowley Turton, said he was genuinely conflicted about today’s interest rate decision: “The economy clearly needs a boost, but inflation remains a concern. Sitting tight for the time being is probably the better option.”
