Family Business UK has warned that a 0.25 percentage point increase in interest rates will add to concerns for family firms facing persistent inflation and rising operating costs.
FBUK’s latest Pulse Survey shows a gradual increase over the past year in family businesses’ reliance on external finance alongside retained earnings to support investment and growth. Higher borrowing costs therefore risk putting further pressure on the resources available to invest, recruit and expand.
Responding to the announcement, Fiona Graham, Chief Operating Officer at Family Business UK, said:
“Our latest Pulse Survey shows a gradual increase over the past year in family firms’ reliance on external finance alongside retained earnings to support investment and growth. Today’s interest rate rise will therefore be a concern for many businesses already grappling with persistent inflationary pressures and rising operating costs.
“Family businesses take a long-term approach to investment and generally value stability and predictability. While a quarter-point rise alone is unlikely to change business plans overnight, policymakers should remain mindful of the cumulative impact of higher borrowing costs on investment, recruitment and growth.
“This is particularly important at a time when many family firms are already navigating significant policy and cost pressures, including changes to Business Property Relief.”
FBUK continues to call for the conditions that enable family businesses to plan with confidence, invest for the long term and support jobs and growth in their communities.