10th August 2011
UK SMEs would benefit from US style fix in interest rates
UK SMEs would benefit from US style fix in interest
UK SMEs would want the Bank of England to follow the US' example
of providing longer term stability on interest rates says Syscap,
the leading independent finance provider.
The US Federal Reserve announced on August 9th that it would
freeze short-term interest rates for two years as a measure to
improve business and consumer confidence.
Explains Philip White, CEO, of Syscap: "A lot of UK SMEs would
be far more willing to invest in business assets and their staff if
they knew that the base rate was going to be capped for the next
"Businesses can fix their borrowing costs with their lender but
obviously the lender has to charge them a premium for that."
"If the Bank of England were to commit to keeping rates fixed
for a set period it would act as a real shot in the arm for the UK
"All the periodical speculation that you get about rising
interest rates can be incredibly unsettling for borrowers."
Syscap explains that a lot of measures used by the Federal
Reserve to try and foster an economic recovery in the US have
subsequently been adopted by the Bank of England.
Syscap says that whilst commercial borrowing rates are not
solely determined by the Bank of England base rate (more often it
is linked to LIBOR) a commitment to steady base rates would be a
very powerful message and should help keep rates across the market
Adds Philip White: "In actual fact in the current climate,
leasing provides an ideal mechanism or facility to fix the cost of
your investment, providing predictability and a hedge against
future rate increases."
See coverage of this press release below:
Director of Finance