The Bank of England has today held interest rates at 5,25% for the third consecutive time.

Following the US Federal Reserve in holding interest rates, the UK base rate will remain at the 15-year high of 5.25%, amid concerns over a slowing UK economy.

The UK economy shrank 0.3% in October following growth of 0.2% in September 2023, the Office for National Statistics confirmed yesterday.

The decline was driven by a 0.2% decline in services, 0.8% decline in production, and a 0.5% drop in the construction sector.

Economists had anticipated there would be no change in GDP following a 0.2% growth in September 2023.

Neil Rudge, head of enterprise at Shawbrook, said: “The Bank of England's decision to maintain the base rate for the third consecutive time hints at a potential plateau in interest rate increases. This will bring relief to business owners in the UK who have potentially been relying on available cash deposits, rather than taking on new finance. Our ongoing observations underscore the resilience of SMEs. With the permanent approval of full expensing, the road ahead appears clearer, promising a more robust and assured future.

“Beyond mainstream retail banks, alternative finance providers are gaining significance in addressing the financial needs of SMEs. We're optimistic that 2024 will witness a surge in bullish investment plans and a heightened demand for specialised finance products, such as asset-based lending. This option alleviates the necessity for business owners to dip into their existing resources to meet financial needs and capitalise on growth opportunities.”