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Press Release

FSB looks forward to interest rates cut

The Federation of Small Businesses has described the Monetary Policy Committee's predicted decision to cut interest rates as "welcome news for the vast majority of the UK's 4million small businesses".

FSB Policy Chairman John Walker said:

"Small businesses have a total £62billion outstanding in loans and £12billion in overdrafts. The average amount owed by SMEs is £88,000 in loans and £21,000 in overdrafts.

"A quarter point cut in rates from 4.75 per cent to 4.5 per cent, which hopefully the MPC will announce, will save small firms more than £30million in repayments to their bank.

"The median margins paid by SMEs on both loans and overdrafts are two points over base. On an average loan and overdraft debt a small business could save about £250 year if the MPC follows through with an expected cut.

"In a worsening economic climate the MPC should understand that small businesses create jobs and wealth and therefore are the key to economic expansion.

"The FSB would like to see them go for the full half point cut now. It will send the right message to all concerned."



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Federation of Small Businesses

Federation of Small Businesses

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