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Economy and base interest rate rise

Journalist: Sarah O'Grady, The Daily Express

ended 23. March 2023

Base rate is up today (Thursday) but it's not all doom and gloom, according to the Bank of England governor and the Chancellor among other economists.  We're not heading into a recession and inflation is set to plummet, employment is rising and the economy is set to grow. I'm looking for positive economic and business comments please? Is your business growing? Is the worst over for the economy now?

11 responses from the Newspage community

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Scott Gallacher
Director at Rowley Turton
The base rate's up but the sky isn't falling down on our heads. Despite the base rate increase, there's no need to panic. Our business has had a fantastic year with record turnover, and we continue expanding and recruiting to enable us to continue taking on new clients. The economy is showing positive signs and we're optimistic about the future.
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Chris Barry
Director at Thomas Legal
Despite the Bank of England's quarter point rate rise on Thursday, it's not all doom and gloom out there. Far from it, in fact. Over the past two months, we have seen the property market really come to life and business levels in March to date are back to the levels they were before the mini-Budget. The spring property market is also around the corner, and many sellers will be encouraged by the fact that they haven’t seen their property values plummet anywhere near as much as some had predicted. We're also seeing an influx of new buyers as mortgage rates have come down sharply since the dark days and weeks following the mini-Budget. On Thursday afternoon, after the Bank of England rate decision, the Nationwide even announced it was cutting rates on selected mortgage products, which is great news for borrowers. There are many reasons to be cheerful right now.
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Jonathan Gordon
Director of Wealth Management at IP Global
We are seeing clear evidence that the UK residential property market is becoming increasingly attractive for overseas investors once more. The UK now seems on course to avoid a technical recession. Also, with Sterling remaining weak, foreign investors continue to benefit from the increased purchasing power of their currency. The positive data around employment and modest economic growth is also providing them with renewed confidence in the UK investment story. This is coupled with improved rental yields over the last 12 months (given the shortage of rental stock) and, in many cases, lower costs of borrowing than in their domestic market. As a result, capital outflows have increased noticeably from many Asian markets including China, Hong Kong and Singapore, as well as an uptick from US-based investors.
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Peter Williams
CEO at Propp
Despite the various economic headwinds, our growth plans are still full steam ahead. There are many opportunities for businesses, even during downturns and periods of economic instability. You just need to be creative and make the most out of every opportunity. As a company, we’ve endured a fair amount of instability of late, particularly during the fallout from the mini-Budget. However, all the signs point towards the fact we are nearing the peak of the interest rate cycle. At Propp, we are very much of the mindset, ‘keep calm and carry on'. We haven’t seen any dip in enquiries and lenders are still demonstrating an appetite to lend.
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Mark Grant
Business Finance Adviser at The Business Finance Branch
If this rate rise has a silver lining, then it's in the minutes of the Monetary Policy Committee meeting. These should give businesses some much-needed confidence and certainty. The minutes said that while inflation increased unexpectedly in February, it is likely to fall sharply over the rest of the year. As long as it does start to fall away, then business confidence will return and grow. This will result in companies investing in assets and staff, and increased productivity and growth. This confidence will also be supported by last week's Budget tax relief incentives on investment in assets, which offsets future tax bills. All in all, there are lots of reasons to be cheerful. The economy is in a far better place then many make out.
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Riz Malik
Independent Financial Adviser at R3 Wealth
Inflation in the United Kingdom is expected to fall in the second half of this year and continue into 2024. There is broad agreement that base rate hikes could be limited, and that once inflation reaches its target, rates could even be reduced. Lenders still have their chequebooks open, keeping us busy, and some are lowering their rates. Despite the difficulties over the past six months, the future looks promising.
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Craig Fish
Director at Lodestone Mortgages
At midday on Thursday, the news that nobody wanted to hear came, and the base rate went up. Less than three hours later and one of the UK's largest lenders lowered some of its rates by 20 basis points more than the increase, wiping away most of that for its customers. It most certainly isn't doom and gloom in the mortgage market, and with the expectation that inflation will drop later in the year, along with the base rate, it certainly looks like brokers across the UK are going to be seeing the year out in a way that wasn't expected on January 1st following the fall out from Trussonomics.
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Dom Carter
Founder & Digital Director at Serotonin
Unfortunately the news on Wednesday wasn’t what anybody wanted: we expected inflation to drop and instead it went up. As a small business based in the north, we rely on many suppliers. Beyond just typical utilities, wifi, office resources, we also have a team of young professionals (most aged 23-28) who are feeling the cost of living rise around them. 

We’re doing our best, we have given two rounds of pay rises in the past 12 months alone but obviously that has an impact on our overheads and profitability as a company and this needs to be passed on to the customer. It’s making recruitment more challenging also. We’re finding that individuals are seeking much higher salaries than what we would have expected to pay for certain roles compared to 12-18 months ago and this is negatively impacting our longer term business planning.
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Samuel Ewen
Managing Director at Rosehill Financial Services
I own a mortgage brokerage and, following the Base Rate increase on Thursday, we’ve already been informed that a large lender will be reducing selected fixed and tracker rates by up to 0.45%. This is positive news for those looking to buy or remortgage, as mortgage rates continue to gradually reduce. I hope to see other lenders follow suit to lessen the blow for mortgage borrowers.
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Luke Thompson
Director at PAB Wealth Management
As much as we hope the worst is over I remain sceptical that inflation will drop as quickly as has been forecast and do still have concerns that the Bank of England may need to continue raising interest rates to try to curb inflation. On the plus side though I have to say that in the mortgage and financial advice world, the start to 2023 has been far more positive than I thought it was going to be. There is a resilience in the property market which I didn't expect to see especially when we look back to how things were in October and November last year. Hopefully, if things continue in the positive manner that they have since the start of this year as a firm we will be able to continue with the expansion plans we initially had in place prior to the 'mini budget' last year.
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Rhys Schofield
Brand Director at Peak Mortgages and Protection
Base rate goes up, the next day Nationwide mortgage rates go down by a larger margin. This just goes to show that despite the doom and gloom mortgage rates for millions won't be quite as bad as they might fear. Everything else may still be stuffed but that at least is a silver lining.