BUSINESS leaders from a selection of different sectors are divided over whether the Bank of England (BoE) should cut its base rate tomorrow, with a slim majority urging policymakers to keep rates on hold, with one saying “what businesses need is stability”.
The Bank’s Monetary Policy Committee (MPC) will announce its latest base rate decision at midday on Thursday, with it widely expected to be held at 3.75%.
Ahead of the announcement, Newspage asked business owners and industry leaders from across the UK what they would do if they were sitting on the MPC.
Of the nine experts surveyed, five backed keeping rates on hold, while four called for an immediate cut of either 0.25% or 0.5%.
A lower base rate would typically feed through to cheaper mortgages and business loans over time, while a decision to hold would signal the BoE remains cautious about inflation despite recent signs of easing price pressures.
While some argued lower rates would help restore confidence and unlock investment, others warned that keeping inflation under control should remain the Bank’s priority, even if that means leaving rates unchanged for longer.
The split reflects the difficult balancing act facing the Bank of England as it weighs supporting economic growth against ensuring inflation continues its path back towards the 2% target.
HOLD
Kate Underwood, Founder at Southampton-based Kate Underwood HR and Training, works in HR and wants a hold.
She added: “A year ago, I’d have said cut. Today, I’m leaning hold. For small businesses, the real issue isn’t borrowing costs, it’s confidence. Business owners are dealing with higher employment costs, regulatory uncertainty, cautious customers, and tighter cash flow. A small rate cut may make headlines, but it won’t change hiring or investment decisions.
“What businesses need is stability they can plan around. Holding rates steady as inflation eases signals consistency, not reaction. The economy isn’t in crisis, but it is stuck. In that environment, certainty matters more than symbolism. When confidence returns, lower rates will start to matter.”
HOLD
Graham Nicoll, Financial Planner, Chartered FCSI at NCL Wealth Partners, works in finance and wants a hold.
He added: “The challenge isn’t just the cost of borrowing or running a business – it’s uncertainty. Investment decisions, recruitment and expansion plans are all being delayed by some because confidence remains fragile.
“A rate cut may provide a short-term sentiment boost, but with inflationary pressure still present, stability is arguably more valuable than a premature move. Businesses need confidence that rates are moving in a sustainable direction, not a series of reversals. A period of stability gives firms greater certainty to plan, invest and make long-term decisions.”
HOLD
Paul Denley, CEO at London-based Oakham Wealth Management, works in wealth management and wants a hold.
He added: “The economy feels flat rather than fragile. Clients are cautious, not capitulating, and business owners are managing costs and delaying investment rather than panicking. A rate cut would provide a short-term sentiment boost, but the Bank should base its decision on the underlying inflation outlook, not simply the desire to boost confidence.
“With services inflation still sticky, holding rates is the prudent course. What the economy needs most is stability and predictability. I don’t see a case for higher rates this year either. Unless inflationary pressures broaden materially, the Bank should resist tightening further.”
HOLD
Craig Bunting, Co-founder at Derby-based BEAR, works in hospitality and wants a hold.
He added: “The bigger cost isn’t borrowing, it’s the supply chain: coffee, food, fuel. A cut might feel good short-term, but if inflation creeps back, wages follow, and that hits us just as hard, just slower. A hike would help control inflation, but it also squeezes consumer spending, and less disposable income means less spend in businesses like ours.
“Cheaper borrowing doesn’t unlock growth for me anyway, my business model needs to make sense first: cost of goods, margins, a profit and loss (P&L) that stacks up. Hold gives us stability to build on.”
HOLD
Justin Moy, Managing Director at Chelmsford-based EHF Mortgages, who works in mortgages wants a hold too.
He added: “We don’t want to go back to a boom and bust economy, while a rate cut would be useful, it’s the kind of decision that will be reversed a few months later.
“The rate is somewhat irrelevant in recent months, more emphasis has been played on the comments and notes from the MPC, as that gives more guidance to the future rate movement, directly influencing the rates for clients today. Be positive about the future and we’ll feel the benefit in business and in our pockets.”
CUT BY 0.5%
Rupert Collingwood, Founder at The London Broker, works in property and wants the BoE to cut 0.5%.
He added: “There can be no doubt that the property market would benefit from a cut in interest rates. The market, certainly in the mid to higher price points, could do with some stimulation as prices continue to soften and supply outstrips demand.
“That being said even at the lower levels of the market, first-time buyers who are often considered the starter motor of the marketplace should also be encouraged to get on the ladder and a rate cut would certainly assist in that regard, and with a little luck that might improve movement further up the ladder.
“Of course anything that gets the market moving will help the wider economy too, as not only do transactions help generate stamp duty receipts, but so much activity flows from the sale and purchasing of property, from solicitors, to removals, tradesmen to interior designers as well as manufacturers and suppliers. Let us hope the MPC considers these wider impacts rather than just controlling inflation.”
CUT BY 0.25%
Harps Garcha, Director at London-based Brooklyns Financial, works as a mortgage broker and wants the BoE to cut by 0.25%.
She added: “The housing market needs some confidence back before it starts moving again. Right now both existing mortgage holders and first-time buyers are hesitant to push ahead with their plans, and the wider geopolitical uncertainty isn’t helping.
“It’s not just about home owners, who will benefit a great deal, a lot of the funding that trading businesses rely on is priced against the Bank of England base rate, so a cut takes real pressure off them, and that matters when almost every other cost they face is only heading one way.”
CUT BY 0.25%
Tony Redondo, Founder at Newquay-based Cosmos Currency Exchange, works in Forex and wants the BoE to cut 0.25%.
He added: “On the front lines, the mood is grinding inertia and trepidation, a repeat of 2024, with government floating ideas like stamp duty reform only to retreat once they meet opposition. Clients are holding their breath. Spending isn’t dead, but every purchase, investment and contract renewal takes longer and faces tighter scrutiny.
“Cash has always been king, now it’s survival. Businesses are exhausted by the squeeze of tax and minimum wage rises, mounting regulation and cumulative inflation. For small businesses, borrowing costs mean the risk of debt outweighs the potential returns. Job-creating projects sit in backlogs, waiting for a signal that borrowing is becoming affordable again. What businesses need isn’t just cheaper credit, it’s a psychological shift.
“A quarter-point cut signals the squeeze is lifting. A small cut won’t spark reckless spending or reignite inflation, but break the stalemate, ease cash-flow pressure through supply chains, and restore momentum to local markets.”
CUT BY 0.25%
Harvey Dhillon, Founder & CEO at Zmartly, works in accounting and wants the BoE to cut 0.25%.
He added: “Watch a small firm run payroll and the pressure shows in one place. The person who left was never replaced, and the owner covers it. Cheaper borrowing will not make a new job affordable. It will make a business willing to try. Small firms run on overdrafts and stock finance, where the rate can move, and those follow Bank Rate first.
“But on a £50,000 overdraft, a quarter point off 3.75% is about £125 a year. Nobody hires on that. What owners are waiting for is the direction to change. Most of my clients sell online, and they are ordering Christmas stock right now, paying in August for money that will not arrive until December.
“If they order cautiously now then they will run out of stock in the most profitable period. There is a fair case for holding, but certainly not increasing. Services inflation was 3.6% in June. But the headline rate fell to 2.6%, and the caution I see is not the sort that reignites prices. Cut while it still changes a decision.”
Photo by Dušan veverkolog on Unsplash.
