The Bank of England has cut interest rates by a quarter percentage point to 5%.
The Bank’s nine-member Monetary Policy Committee (MPC) voted five to four to bring borrowing costs down, bringing to an end the joint-longest plateau for rates since the Bank was granted independence in 1997.
Rates were last cut at the onset of the coronavirus pandemic in March 2020.
The decision by the Bank’s nine-member committee was finely balanced – five, including governor Andrew Bailey, voted for a quarter point cut.
The news was warmly greeted by the hospitality and on-trade sector, Michael Kill, CEO of the Night Time Industries Association said:
“As CEO of the Night Time Industries Association, I welcome today’s announcement by the Bank of England to reduce interest rates from the 16-year high of 5.25 percent to 5% Percent.”
“This decision is a significant step in the right direction for our sector, which has faced immense challenges over the past few years. High interest rates have placed a substantial burden on businesses within the night time economy, exacerbating financial pressures and hindering recovery efforts post-pandemic. The reduction in interest rates is a positive signal that will help alleviate some of these financial strains, providing much-needed relief to our members.”
“Lower interest rates will reduce borrowing costs, enabling businesses to invest in growth, create jobs, and continue to provide the vibrant nightlife that is so vital to the cultural and economic fabric of our cities. This move will also help to stimulate consumer spending, which is crucial for the survival and prosperity of nightlife venues, events, and associated industries.”
“While this decision is a step forward, we must remain vigilant and continue to advocate for further measures that support our sector. The night time economy is a critical part of the UK’s overall economy, and it is essential that we ensure its sustainability and resilience in the face of ongoing challenges.”
“We look forward to working with the Bank of England, government officials, and other stakeholders to build on this progress and secure a thriving future for the night time industries.”
Allen Simpson, Deputy Chief Executive of UKHospitality, said:
“I hope this will provide some relief for businesses that are continuing to pay back Covid loans, and encourage consumers to spend.
“Now is the time to press the accelerator on growth. We need to see interest rates continue to fall, and for the Government to urgently implement its promised reforms to business rates. Combined, this will see a meaningful and much-needed boost for hospitality businesses.”
