Bank of England rate rise means additional pressure on small firms in Wales

Press Releases 22 Sep 2022

FSB Wales on the latest announcement from Bank of England

Following today’s decision by the Bank of England to increase the base rate from 1.75% to 2.25%, Federation of Small Businesses (FSB) Wales Policy Chair Ben Francis said:

“The latest inflation figures spell yet another barrier on small business growth aspirations.

The increased pressure the Bank of England announcement places on small businesses cannot be ignored. Our figures show that small businesses’ perception of credit availability and affordability is firmly in negative territory and decreased between the first and second quarters.

The welcome announcement of the energy support for businesses yesterday went some way to ease the short-term pressure many small firms are facing, but the long-term reality for small firms remains uncertain. This is especially true for the firms who agreed to new or renewed contracts before the 1 April cut-off at a much higher price than they were previously paying, and for those who signed up after that date but who have been facing half a year’s-worth of vastly costlier energy prices.

The Prime Minister’s government is calling the mini-fiscal event tomorrow a growth plan. If it will indeed stimulate growth against the backdrop of significant challenges, it is vital that the Chancellor makes a strong statement in support of small businesses and self-employed people.

Among the measures FSB would welcome, include the reversal of the NICs increase, and a cut to fuel duty. Looking to a Welsh Government response, we are calling for an overhaul of business rates, which would make a real difference to everyday small businesses.

Meet the author

Gwyneth Sweatman

Gwyneth Sweatman

Head of Public Affairs