No change again from MPC
In bad news for owners of small businesses, the Bank of England's Monetary Policy Committee (MPC) has opted to keep interest rates at five per cent.
Many would have hoped for a drop in interest rates to help ease the strain of paying back both business loans and possibly a mortgage, but that reduction was not forthcoming. While many householders will be feeling the pinch of inflation and spiralling mortgage and credit costs, those who own their own business will be doubly hit.
The MPC decided to keep the rates on hold for a further month in a bid to stabilise the economy but some were opposed to the decision, including The TUC (Trades Union Congress).
"While the Government talks of the need for an economic recovery plan to restart growth in the UK, the Bank is doing all it can to hold down consumer confidence and business investment," said TUC Head of Economics and Social Affairs Adam Lent.
"This is not the time to be holding rates when the prospects for the economy in 2009 look increasingly weak. The Bank should cut and cut fast."
Refer your accountant to PCG.
The Bank of England's quarterly Inflation Report is due next Wednesday and will make interesting reading.
Some expect inflation to reach more than four per cent, with economists predicting five per cent by September.
With this in mind, small businesses and sole traders will have to be especially prudent with costs rising and income stagnating.
