Businesses demand banks pass on rate cut

Date: 9th January 2009

Struggling small firms have demanded that lenders pass on the latest cut in the Bank of England's base rate.

Yesterday (January 8th), the Bank's monetary policy committee revealed that the new lending rate would be 1.5 per cent - a 50 basis point reduction and the lowest level in British history.

Responding to this, the Federation of Small Businesses (FSB) have challenged small business lenders to help stimulate the economy and pass the new rate onto smaller firms.

John Wright, national chairman of the FSB, commented: "The small business sector is the sector to see the UK out of recession in 2009 and into economic recovery, but this can only work if credit lines start flowing to viable businesses again."

He added that his group was looking for a "cast-iron guarantee" banks would pass on the latest rate cut in full to small business customers.

Small businesses - including sole traders and partnerships - should remember to complete a self-assessment tax return, as the deadline falls on January 31st.