The Bank of England has kept interest rates unchanged at 5%, saying should be able to cut interest rates “gradually over time”.
The decision comes as prices continue to rise marginally faster than the Bank’s target, with inflation remaining at 2.2% last month.
Bank boss Andrew Bailey said it was “vital” that inflation remains low. “So we need to be careful not to cut too fast or by too much,” he said.
The decision not to cut rates today makes the need to address the business rates cliff edge in April more urgent, according to trade body UKHospitality.
Kate Nicholls, Chief Executive of UKHospitality, said:
“It’s disappointing that interest rates will remain unchanged, after another month of stabilised inflation.
“This positive sign should have emboldened the Bank to take decisive action that would inject some confidence into businesses and, crucially for hospitality, begin to relieve the pressure of Covid loan repayments.
“These repayments remain a significant burden for businesses, particularly with interest rates remaining high.
“Without a rate cut today, the need for the Government to avoid a business rates cliff edge in April becomes more urgent. Venues face their bills quadrupling when relief ends, which is why we’re calling for action and for the Government to introduce a lower, permanent and universal multiplier for hospitality.”
Michael Kill, CEO of Night Time Industries Association said:
“We had hoped the Bank of England would be confident enough to lower interest rates, but their decision to hold at 5%, coupled with inflation remaining stagnant, is another blow for night-time economy businesses. Although inflation is steady, businesses won’t feel the benefit of any shift for months to come. This, along with the barrage of policy changes—ranging from employment rights to Martyn’s Law—and constantly shifting operating conditions, leaves our sector struggling to build a foundation to recover from.”
“With the Autumn budget approaching, the government must provide targeted support for SMEs and cultural businesses, including extending business rates relief and cutting VAT. While immediate action is critical, long-term reform is equally vital to ensure stability for the sector.”
“The message from the industry is clear: allow us to recover—we need stability. The night-time economy is a cornerstone of UK culture and the wider economy. The Chancellor must act now to protect businesses, jobs, and communities before it’s too late.”
